The Company is required to pay all fees and expenses incident to the
registration of the shares. The Company has agreed to indemnify the selling
stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
16
GUARANTY
(Corporate)
New York, New York
December 4, 2002
FOR VALUE RECEIVED, and in consideration of investments 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 Comverge Technologies, Inc. ("Debtor") from
time to time and at any time pursuant to that certain Purchase and Security
Agreement, dated as of the date hereof (the "Purchase Agreement") and for other
good and valuable consideration and to induce Laurus 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 Laurus may deem advisable or as
required by the Purchase Agreement or the Note, the undersigned (the "Guarantor"
or "the undersigned") unconditionally guaranties to Laurus, 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 Debtor to Laurus under the Note (as defined in the Purchase Agreement)
and of all instruments of any nature evidencing or relating to any such
obligations and liabilities under the Note upon which Debtor is or may become
liable to Laurus, whether secured or unsecured, absolute or contingent, joint or
several, or arising under the Note or under any documents, instruments or
agreements relating to or executed in connection with the Note or any documents,
instruments or agreements referred to therein (together with the Note, as each
may be amended, modified, restated or supplemented from time to time, the
"Documents"), or otherwise (all of which are herein collectively referred to as
the "Obligations"), and irrespective of the genuineness, validity, regularity or
enforceability of 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.
In furtherance of the foregoing, the undersigned xxxxxx agrees as follows:
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, and may also make any 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. The undersigned guarantees that the Obligations
will be paid strictly in accordance with the terms of the Note 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. Guarantor hereby knowingly accepts 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 Guarantor 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 acknowledges
that any extension of credit to the Debtor shall be governed solely by the
provisions of the Documents. The liability 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 by (to the extent permitted by
law): (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 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 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 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
security, for all or any of the Obligations or (g) any other circumstance which
would otherwise constitute a defense available to, or a discharge of, the
undersigned. 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 or performance. 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
Guarantor hereby waives any and all rights which it may have by statute or
otherwise which would require Laurus 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
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 Obliga-tions), statute of
frauds, bankruptcy, infancy, statute of limitations, accord and satisfaction,
and usury.
(b) 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
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undersigned and (ii) presentment to or demand of payment from Debtor or the
Guarantor, 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
made 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 Xxxxxx on account of the Obligations are paid in full
and the Documents have been terminated. If, notwithstanding the foregoing, any
amount 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 and 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 three (3) 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 the undersigned are hereby
waived and postponed in favor of, and subordinated to the full payment and
performance of, all Obligations of Debtor to Laurus.
4. REPRESENTATIONS AND WARRANTIES. The undersigned hereby represents
and warrants (all of which representations and warranties shall survive until
all Obligations are satisfied in full and the Documents have been irrevocably
terminated), that:
(a) CORPORATE STATUS. The undersigned 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, except where such failure does not have a material adverse
effect on the business, operations, assets or condition, financial or
otherwise, of the undersigned ("Material Adverse Effect").
(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, in any material respect, 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 Laurus on any of the property or assets of the
undersigned pursuant to the provisions of any of the foregoing.
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(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.
(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.
(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 Documents or other
Obligation incurred by Debtor to Laurus.
5. ACCELERATION. (a) If 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 Laurus's possession, or
otherwise, except if any such lien or encumbrances does not have a Material
Adverse Effect, any and all Obligations shall for purposes hereof, at Laurus's
option, be deemed due and payable without notice notwithstanding that any such
Obligation is not then due and payable by Debtor.
(b) The undersigned will promptly notify Laurus 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 except for any such defaults that does not have a Material Adverse
Effect, Laurus shall have the right to accelerate the undersigned's obligations
hereunder.
6. 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.
7. 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 and the Documents have been 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 the undersigned under this Guaranty.
8. 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
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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.
9. 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.
10. 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.
11. 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 LAURUS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
12. 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 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. THE UNDERSIGNED WAIVES ANY
5
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.
----- --- ----------
13. 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.
14. 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.
15. 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 transmission
confirmed electronically or by a transaction report, if by facsimile, or (d)
when delivered, if by a reputable overnight delivery service in each event, to
the numbers and/or address set forth beneath the signature of the undersigned,
with a copy to Xxxxxxx Xxxxxx, Esq., Xxxxxxxxxx Xxxxxxxxx & Xxxxxx LLP, 00 Xxxx
00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, facsimile: 000-000-0000.
16. 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.
17. RELEASE. Nothing except the termination of this Guaranty as set
forth in Section 8 hereof 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
4TH day of December, 2002.
DATA SYSTEMS & SOFTWARE INC.
By:_________________________________________
Name: Xxxxxx Xxxxxxxxxxx
Title: President and Chief Executive Officer
Address: 000 Xxxxx 00 Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Facsimile No.: 000-000-0000
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