EXECUTION COPY
GUARANTY AGREEMENT
This GUARANTY AGREEMENT (the "Guaranty") is made and entered into as of
February 1, 2002 by and among the subsidiaries of Infocrossing listed on
Schedule A attached hereto (each a "Guarantor" and collectively, the
"Guarantor(s)"), Infocrossing, Inc., a Delaware corporation ("Infocrossing"),
Xxxxxx Xxxxxxx Strategic Partners Fund, L.P., a Delaware limited partnership
("CW"), Strategic Associates, L.P., a Delaware limited partnership ("SA"),
Camden Partners Strategic Fund II-A, L.P., a Delaware limited partnership
("Camden II-A"), and Camden Partners Strategic Fund II-B, L.P., a Delaware
limited partnership ("Camden II-B" and, together with CW, SA, Camden II-A and
Camden II-B, the "Purchasers"),
WHEREAS, the Purchasers and Infocrossing (the parent company of the
Guarantor(s)) are parties to that certain Securities Purchase Agreement, dated
as of the date hereof (the "Purchase Agreement") providing for the issuance by
Infocrossing to the Purchasers of the aggregate principal amount of $10 million
in debentures (the "Debentures") and warrants to acquire common stock of
Infocrossing (the "Warrants"); and
WHEREAS, it is a condition of the consummation of the transactions
contemplated by the Purchase Agreement that the Guarantor(s) enter into and
deliver this Guaranty; and
WHEREAS, the transactions contemplated by the Purchase Agreement are
beneficial to the Guarantor(s) and it is in consideration for such benefits that
the Guarantor(s) agrees to enter into this Guaranty.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
Defined terms used herein shall have the meaning set forth in the Purchase
Agreement if not defined herein.
ARTICLE I
GUARANTEE
Section 1.01. The Guarantee. The Guarantors hereby jointly and severally
guarantee as a primary obligor and not as a surety to each Purchaser and their
respective successors and assigns the prompt payment in full when due (whether
at stated maturity, by acceleration or otherwise) of the principal of and
interest (including any interest, fees, costs or charges that would accrue but
for the provisions of the United States Federal Bankruptcy Code of 1978, as
amended or supplemented from time to time (the "Bankruptcy Code") after any
bankruptcy or insolvency petition under the Bankruptcy Code) on the Debentures
issued to and held by the Purchasers from time to time owing to the Purchasers
by Infocrossing under the Purchase Agreement, in each case strictly in
accordance with the terms thereof (such obligations being herein collectively
called the "Guaranteed Obligations.") The Guarantors hereby jointly and
severally agree that if Infocrossing shall fail to pay in full when due (whether
at stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations, the Guarantors will promptly pay the same, without any demand or
notice whatsoever, and that in the case of any extension of time of payment or
renewal of any of the Guaranteed Obligations, the same will be promptly paid in
full when due (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal. Subject to Section 1.03,
the obligations of the Guarantors under this Section 1.01 shall terminate when
all Guaranteed Obligations have been paid in full.
Section 1.02. Obligations Unconditional. The obligations of the Guarantors
under Section 1.01 are absolute, irrevocable and unconditional, joint and
several, irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of Infocrossing under the Debenture or the
Purchase Agreement or any other agreement or instrument referred to herein or
therein, or any substitution, release or exchange of any other guarantee of or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a
surety or Guarantor (except for payment in full). Without limiting the
generality of the foregoing, the occurrence of any one or more of the following
shall not alter or impair the liability of the Guarantors hereunder, which shall
remain absolute, irrevocable and unconditional under any and all circumstances
as described above:
(i) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;
(ii) any of the acts mentioned in any of the provisions of the
Debenture or the Purchase Agreement or any other agreement or instrument
referred to herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be amended in any
respect, or any right under the Debenture or the Purchase Agreement or any
other agreement or instrument referred to herein or therein shall be
amended or waived in any respect or any other guarantee of any of the
Guaranteed Obligations or any security therefore shall be released or
exchanged in whole or in part or otherwise dealt with;
(iv) any other Guarantor shall be released; or
(v) any other Person shall become a guarantor of the Guaranteed
Obligations.
The Guarantors hereby expressly waive diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement that any
Purchaser thereof exhaust any right, power or remedy or proceed against
Infocrossing under the Debenture or the Purchase Agreement or any other
agreement or instrument referred to herein or therein, or against any other
Person under any other guarantee of, or security for, any of the Guaranteed
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Obligations The Guarantors waive any and all notice of the creation, renewal,
extension, waiver, termination or accrual of any of the Guaranteed Obligations
and notice of or proof of reliance by any Purchaser upon this guarantee or
acceptance of this guarantee, and the Guaranteed Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred in
reliance upon this guarantee, and all dealings between Infocrossing and the
Purchasers, shall likewise by conclusively presumed to have been had or
consummated in reliance upon this guarantee. This guarantee shall be construed
as a continuing, absolute, irrevocable and unconditional guarantee of payment
without regard to any right of offset with respect to the Guaranteed Obligations
at any time or from time to time held by the Purchasers, and the obligations and
liabilities of the Guarantors hereunder shall not be conditioned or contingent
upon the pursuit by the Purchasers or any other Person at any time of any right
or remedy against Infocrossing or against any other Person which may be or
become liable in respect of all or any part of the Guaranteed Obligations or
against any collateral security or guarantee therefore or right of offset with
respect thereto. This guarantee shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon the Guarantors
and the successors and assigns thereof, and shall inure to the benefit of the
Purchasers, and their respective successors and assigns, notwithstanding that
from time to time during the term of this Guaranty there may be no Guaranteed
Obligations outstanding.
Section 1.03. Reinstatement. The obligations of the Guarantors under this
Guaranty shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of Infocrossing in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise. The Guarantors jointly and severally agree that
they will indemnify each Purchaser on demand for all reasonable costs and
expenses (including reasonable fees of counsel) incurred by such Purchaser in
connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law, other than any costs or expenses
resulting from the gross negligence or bad faith of such Purchaser.
Section 1.04. Subrogation; Subordination. Each Guarantor hereby agrees that
until the indefeasible payment and satisfaction in full in cash of all
Guaranteed Obligations and the expiration and termination of the obligations of
Infocrossing under the Debenture it shall not exercise any right or remedy
arising by reason of any performance by it of its guarantee in Section 1.01,
whether by subrogation or otherwise, against Infocrossing or any other Guarantor
of any of the Guaranteed Obligations or any security for any of the Guaranteed
Obligations. The payment of any amounts due with respect to any indebtedness of
Infocrossing or any other Guarantor now or hereafter owing to any Guarantor by
reason of any payment by such Guarantor under this Guaranty is hereby
subordinated to the prior indefeasible payment in full in cash of the Guaranteed
Obligations. Each Guarantor agrees that it will not demand, xxx for or otherwise
attempt to collect any such indebtedness of Infocrossing to such Guarantor until
the Guaranteed Obligations shall have been indefeasibly paid in full in cash.
Section 1.05. The Guarantors jointly and severally agree that, as between
the Guarantors and the Purchasers, the obligations of Infocrossing under the
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Debenture and the Purchase Agreement may be declared to be forthwith due and
payable as provided in Section 3.2 of the Debenture (and shall be deemed to have
become automatically due and payable in the circumstances provided in said
Section 3.2 of the Debenture) for purposes of Section 1.01, notwithstanding any
stay, injunction or other prohibition preventing such declaration (or such
obligations from becoming automatically due and payable) as against Infocrossing
and that, in the event of such declaration (or such obligations being deemed to
have become automatically due and payable), such obligations (whether or not due
and payable by Infocrossing) shall forthwith become due and payable by the
Guarantors for purposes of Section 1.01.
Section 1.06. Instrument for the Payment of Money. Each Guarantor hereby
acknowledges that the guarantee in this Guaranty constitutes an instrument for
the payment of money, and consents and agrees that any Purchaser, as its sole
option, in the event of a dispute by such Guarantor in the payment of any moneys
due hereunder, shall have the right to bring a motion-action under New York CPLR
Section 3213.
Section 1.07. Continuing Guarantee. The guarantee in this Guaranty is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
Section 1.08. General Limitation on Guarantee Obligations. In any action or
proceeding involving any state corporate law, or any state, federal or foreign
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 1.01
would otherwise be held or determined to be void, voidable, invalid or
unenforceable, or subordinated to the claims of any other creditors on account
of the amount of its liability under Section 1.01, then, notwithstanding any
other provision to the contrary, the amount of such liability shall, without any
further action by such Guarantor, any Purchaser or any other Person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.
Section 1.09. Limitation on Guaranty Amount. The obligations of the
Guarantor hereunder shall be limited to an aggregate amount that is equal to the
largest amount that would not render the obligations of the Guarantor hereunder
subject to avoidance under Section 548 of the United States Bankruptcy Code or
any comparable provisions of applicable law.
Section 1.10. Additional Guarantors. Upon Infocrossing creating or
acquiring any subsidiary after the date hereof (including as a result of the
Proposed Acquisition (as defined in the Purchase Agreement)), each such
subsidiary shall become a Guarantor by executing a counterpart signature page to
this Agreement. At such time, Infocrossing shall revise Schedule A accordingly
and such subsidiary shall have the rights and obligations of a Guarantor
hereunder.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE GUARANTORS
Each Guarantor hereby severally, and not jointly, represents and warrants
to each Purchaser, as of the date hereof as follows:
Section 2.01. Organization; Authorization; Enforceability. Such Guarantor
is duly organized, validly existing and in good standing under the laws of its
state of incorporation and has all requisite corporate power and authority to
own, lease and operate its properties and assets and to carry on its business as
it is now being conducted and as currently proposed to be conducted. Such
Guarantor has all the necessary corporate or power and authority to execute,
deliver and perform its obligations under this Guaranty and has taken all
corporate action necessary to authorize the execution, delivery and performance
by it of this Guaranty and to consummate the transactions contemplated hereby
and thereby. No other corporate or stockholder proceedings on the part of such
Guarantor are necessary for such authorization, execution, delivery and
consummation. Such Guarantor has duly executed and delivered this Guaranty. The
execution, delivery and performance of the transactions contemplated by this
Guaranty and compliance with their provisions by the such Guarantor will not
violate any provision of law and will not conflict with or result in any breach
of any of the terms, conditions or provisions of, or constitute a default under,
or require a consent or waiver under, the certificate of incorporation or bylaws
of the Guarantor, or any indenture, lease, agreement or other instrument to
which the Guarantor is a party or by which it or any of its properties is bound.
This Guaranty constitutes a legal, valid and binding obligation of such
Guarantor, except to the extent that its enforceability may be subject to
applicable bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and to general equitable principles.
Section 2.02. No Liens. The personal property, real property, intellectual
property and assets of the Guarantor are free of all Liens. "Liens" shall mean,
any mortgage, pledge, assessment, security interest, lease, sublease, lien,
adverse claim, levy, charge, option, right of others or restriction (whether on
voting, sale, transfer, disposition or otherwise) or other encumbrance of any
kind.
ARTICLE III
COVENANTS
Section 3.01. Covenants. Each Guarantor covenants and agrees to act in
accordance with the covenants set forth in Article V of the Purchase Agreement
and not to take any action prohibited by the negative covenants set forth in
Article VI of the Purchase Agreement by substituting such Guarantor for each
reference to the "Company" (and deleting references to "Subsidiaries") in
Articles V and VI of the Purchase Agreement.
ARTICLE IV
MISCELLANEOUS
Section 4.01. Termination. This Guaranty shall terminate upon the
satisfaction in full by Infocrossing or the Guarantors of all of the Guaranteed
Obligations.
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Section 4.02. Governing Law. This Agreement shall be governed by,
interpreted under, and construed in accordance with the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of law thereof.
Section 4.03. Modifications and Amendments. No amendment, modification or
termination of this Guaranty shall be binding unless executed in writing by each
Guarantor and each Purchaser.
Section 4.04. Waivers and Extensions. The Purchasers may waive any
condition, right, breach or default under this Guaranty, provided that such
waiver will not be effective against the Purchasers unless it is in writing, is
signed by each Purchaser, and specifically refers to this Agreement. Waivers may
be made in advance or after the right waived has arisen or the breach or default
waived has occurred. Any waiver may be conditional. No waiver of any breach of
any agreement or provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof nor of any other agreement or provision
herein contained. No waiver or extension of time for performance of any
obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.
Section 4.05. Severability. This Guaranty shall be deemed severable, and
the invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of this Guaranty or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that there shall be added as a part of
this Guaranty a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
Section 4.06. Counterparts; Fax Signatures. This Guaranty may be executed
in counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument. Any signature page
delivered by a fax machine or telecopy machine shall be binding to the same
extent as an original signature page, with regard to any agreement subject to
the terms hereof or any amendment thereto. Any party who delivers such a
signature page agrees to later deliver an original counterpart to any party
which requests it.
Section 4.07. Further Assurances. As between the Guarantors and the
Purchasers, each party hereto, upon the request of any other party hereto, shall
do all such further acts and execute, acknowledge and deliver all such further
instruments and documents as may be necessary or desirable to carry out the
transactions contemplated by this Guaranty.
Section 4.08. Notices. Any notice, request, demand, waiver, consent,
approval or other communication which is required or permitted hereunder shall
be in writing and shall be deemed given only if delivered personally or sent by
telefax (with confirmation of transmission), by recognized courier service (with
receipt acknowledged) or by registered or certified mail, postage prepaid, as
follows:
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(a) If to Guarantor or Infocrossing, to:
0 Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Fax: 000.000.0000
with a copy, which shall not constitute adequate notice, to:
White & Case
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000.000.0000
Attention: X. Xxxx Xxxxxxxxx, Esq.
(b) If to the Purchasers, to:
Camden Partners, Inc.
Xxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
Fax No.: 000.000.0000
with a copy, which shall not constitute adequate notice, to:
Xxxxxx, Xxxxxx & Xxxxxxxxx
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxxx, Esq.
Fax: 000.000.0000
or such other address as the addressee may have specified in a notice duly given
to the sender as provided herein. Such notice, request, demand, waiver, consent,
approval or other communication shall be deemed to have been given as of the
date so delivered personally or by courier, telefaxed or five (5) business days
after deposited in the mail.
(Signature page follows)
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IN WITNESS WHEREOF, the parties hereto have executed this Guaranty as of
the date first above written.
ETG, INC.
By:
----------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Executive Officer
INFOCROSSING, INC.
By:
----------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Executive Officer
CAMDEN PARTNERS STRATEGIC FUND II-A, L.P.
By: Camden Partners Strategic II, LLC,
its General Partner
By:
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Member
Address: Camden Partners
Xxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
CAMDEN PARTNERS STRATEGIC FUND II-B, L.P.
By: Camden Partners Strategic II, LLC,
its General Partner
By:
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Member
Address: Camden Partners
Xxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
XXXXXX, XXXXXXX STRATEGIC PARTNERS FUND, L.P.
By: Xxxxxx, Xxxxxxx Strategic Partners, L.P.,
its General Partner
By:
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: General Partner
Address: Camden Partners
Xxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
STRATEGIC ASSOCIATES, L.P.
By: Xxxxxx, Xxxxxxx Strategic Partners, L.P.,
its General Partner
By:
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: General Partner
Address: Camden Partners
Xxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Fax No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
Schedule A
Guarantors
ETG, Inc., a Delaware corporation
