EXHIBIT 99.3
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SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE, dated as of June 30, 2006 (this "Guarantee"),
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, (the "Guarantors"), in favor of the
purchasers signatory (the "Purchasers") to that certain Securities Purchase
Agreement, dated as of the date hereof, between XXXXxx.xxx, Inc., a Delaware
corporation (the "Company") and the Purchasers.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Securities Purchase Agreement, dated
as of the date hereof, by and between the Company and the Purchasers (the
"Purchase Agreement"), the Company has agreed to sell and issue to the
Purchasers, and the Purchasers have agreed to purchase from the Company the
Company's Secured Convertible Debentures, due December 28, 2008 (the
"Debentures"), subject to the terms and conditions set forth therein; and
WHEREAS, each Guarantor will directly benefit from the extension of
credit to the Company represented by the issuance of the Debentures; and
NOW, THEREFORE, in consideration of the premises and to induce the
Purchasers to enter into the Purchase Agreement and to carry out the
transactions contemplated thereby, each Guarantor hereby agrees with the
Purchasers as follows:
1. DEFINITIONS. Unless otherwise defined herein, terms defined in the
Purchase Agreement and used herein shall have the meanings given to them in the
Purchase Agreement. The words "hereof," "herein," "hereto" and "hereunder" and
words of similar import when used in this Guarantee shall refer to this
Guarantee as a whole and not to any particular provision of this Guarantee, and
Section and Schedule references are to this Guarantee unless otherwise
specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. The following
terms shall have the following meanings:
"Guarantee" means this Subsidiary Guarantee, as the same may
be amended, supplemented or otherwise modified from time to time.
"Obligations" means the collective reference to all
obligations and undertakings of the Company of whatever nature,
monetary or otherwise, under the Debentures, the Purchase Agreement,
the Security Agreement, the Warrants, the Registration Rights Agreement
or any other future agreement or obligations undertaken by the Company
to the Purchasers, together with all reasonable attorneys' fees,
disbursements and all other costs and expenses of collection incurred
by Purchasers in enforcing any of such Obligations and/or this
Guarantee.
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2. GUARANTEE.
(a) Guarantee.
(i) The Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantee to the
Purchasers and their respective successors, indorsees,
transferees and assigns, the prompt and complete
payment and performance by the Company when due
(whether at the stated maturity, by acceleration or
otherwise) of the Obligations.
(ii) Anything herein or in any other Transaction Document to
the contrary notwithstanding, the maximum liability of
each Guarantor hereunder and under the other
Transaction Documents shall in no event exceed the
amount which can be guaranteed by such Guarantor under
applicable federal and state laws, including laws
relating to the insolvency of debtors, fraudulent
conveyance or transfer or laws affecting the rights of
creditors generally (after giving effect to the right
of contribution established in Section 2(b)).
(iii) Each Guarantor agrees that the Obligations may at any
time and from time to time exceed the amount of the
liability of such Guarantor hereunder without impairing
the guarantee contained in this Section 2 or affecting
the rights and remedies of the Purchasers hereunder.
(iv) The guarantee contained in this Section 2 shall remain
in full force and effect until all the Obligations and
the obligations of each Guarantor under the guarantee
contained in this Section 2 shall have been satisfied
by payment in full.
(v) No payment made by the Company, any of the Guarantors,
any other guarantor or any other Person or received or
collected by the Purchasers from the Company, any of
the Guarantors, any other guarantor or any other Person
by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time
to time in reduction of or in payment of the
Obligations shall be deemed to modify, reduce, release
or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment
(other than any payment made by such Guarantor in
respect of the Obligations or
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any payment received or collected from such Guarantor
in respect of the Obligations), remain liable for the
Obligations up to the maximum liability of such
Guarantor hereunder until the Obligations are paid in
full.
(vi) Notwithstanding anything to the contrary in this
Agreement, with respect to any defaulted non-monetary
Obligations the specific performance of which by the
Guarantors is not reasonably possible (e.g. the
issuance of the Company's Common Stock), the Guarantors
shall only be liable for making the Purchasers whole on
a monetary basis for the Company's failure to perform
such Obligations in accordance with the Transaction
Documents.
(b) Right of Contribution. Each Guarantor hereby agrees that
to the extent that a Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Guarantor shall
be entitled to seek and receive contribution from and against any other
Guarantor hereunder which has not paid its proportionate share of such
payment. Each Guarantor's right of contribution shall be subject to the
terms and conditions of Section 2(c). The provisions of this Section
2(b) shall in no respect limit the obligations and liabilities of any
Guarantor to the Purchasers, and each Guarantor shall remain liable to
the Purchasers for the full amount guaranteed by such Guarantor
hereunder.
(c) No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any
Guarantor by the Purchasers, no Guarantor shall be entitled to be
subrogated to any of the rights of the Purchasers against the Company
or any other Guarantor or any collateral security or guarantee or right
of offset held by the Purchasers for the payment of the Obligations,
nor shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Company or any other Guarantor in respect of
payments made by such Guarantor hereunder, until all amounts owing to
the Purchasers by the Company on account of the Obligations are paid in
full. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Obligations shall not
have been paid in full, such amount shall be held by such Guarantor in
trust for the Purchasers, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be
turned over to the Purchasers in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Purchasers, if
required), to be applied against the Obligations, whether matured or
unmatured, in such order as the Purchasers may determine.
(d) Amendments, Etc. With Respect to the Obligations. Each
Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without
notice to or further assent by any Guarantor, any demand for payment of
any of the Obligations made by the
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Purchasers may be rescinded by the Purchasers and any of the
Obligations continued, and the Obligations, or the liability of any
other Person upon or for any part thereof, or any collateral security
or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended,
modified, accelerated, compromised, waived, surrendered or released by
the Purchasers, and the Purchase Agreement and the other Transaction
Documents and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Purchasers may deem advisable from time to
time, and any collateral security, guarantee or right of offset at any
time held by the Purchasers for the payment of the Obligations may be
sold, exchanged, waived, surrendered or released. The Purchasers shall
have no obligation to protect, secure, perfect or insure any Lien at
any time held by them as security for the Obligations or for the
guarantee contained in this Section 2 or any property subject thereto.
(e) Guarantee Absolute and Unconditional. Each Guarantor
waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance by
the Purchasers upon the guarantee contained in this Section 2 or
acceptance of the guarantee contained in this Section 2; the
Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon the guarantee contained in this Section 2; and
all dealings between the Company and any of the Guarantors, on the one
hand, and the Purchasers, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon
the guarantee contained in this Section 2. Each Guarantor waives to the
extent permitted by law diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Company or
any of the Guarantors with respect to the Obligations. Each Guarantor
understands and agrees that the guarantee contained in this Section 2
shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or
enforceability of the Purchase Agreement or any other Transaction
Document, any of the Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any
time or from time to time held by the Purchasers, (b) any defense,
set-off or counterclaim (other than a defense of payment or performance
or fraud or misconduct by Purchasers) which may at any time be
available to or be asserted by the Company or any other Person against
the Purchasers, or (c) any other circumstance whatsoever (with or
without notice to or knowledge of the Company or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Company for the Obligations, or of such Guarantor
under the guarantee contained in this Section 2, in bankruptcy or in
any other instance. When making any demand hereunder or otherwise
pursuing its rights and remedies hereunder against any Guarantor, the
Purchasers may, but shall be under no obligation to, make a similar
demand on or otherwise pursue such rights and remedies as they may have
against the Company, any other Guarantor or any other Person or against
any collateral security or guarantee for
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the Obligations or any right of offset with respect thereto, and any
failure by the Purchasers to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Company, any
other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of
offset, or any release of the Company, any other Guarantor or any other
Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the
Purchasers against any Guarantor. For the purposes hereof, "demand"
shall include the commencement and continuance of any legal
proceedings.
(f) Reinstatement. The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the Obligations
is rescinded or must otherwise be restored or returned by the
Purchasers upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Company or any Guarantor, or upon or as a result
of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Company or any Guarantor or any
substantial part of its property, or otherwise, all as though such
payments had not been made.
(g) Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Purchasers without set-off or
counterclaim in U.S. dollars at the address set forth or referred to in
the Purchase Agreement.
3. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby makes the
following representations and warranties to Purchasers as of the date hereof:
(a) Organization and Qualification. The Guarantor is a
corporation, duly incorporated, validly existing and in good standing
under the laws of the applicable jurisdiction set forth on Schedule 1,
with the requisite corporate power and authority to own and use its
properties and assets and to carry on its business as currently
conducted. The Guarantor has no subsidiaries other than those
identified as such on the Disclosure Schedules to the Purchase
Agreement. The Guarantor is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which
the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or
in good standing, as the case may be, could not, individually or in the
aggregate, (x) adversely affect the legality, validity or
enforceability of any of this Guaranty in any material respect, (y)
have a material adverse effect on the results of operations, assets,
prospects, or financial condition of the Guarantor or (z) adversely
impair in any material respect the Guarantor's ability to perform fully
on a timely basis its obligations under this Guaranty (a "Material
Adverse Effect").
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(b) Authorization; Enforcement. The Guarantor has the
requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Guaranty, and otherwise to carry
out its obligations hereunder. The execution and delivery of this
Guaranty by the Guarantor and the consummation by it of the
transactions contemplated hereby have been duly authorized by all
requisite corporate action on the part of the Guarantor. This Guaranty
has been duly executed and delivered by the Guarantor and constitutes
the valid and binding obligation of the Guarantor enforceable against
the Guarantor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies
or by other equitable principles of general application.
(c) No Conflicts. The execution, delivery and performance of
this Guaranty by the Guarantor and the consummation by the Guarantor of
the transactions contemplated thereby do not and will not (i) conflict
with or violate any provision of its Certificate of Incorporation or
By-laws or (ii) conflict with, constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the
Guarantor is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Guarantor is subject
(including Federal and state securities laws and regulations), or by
which any material property or asset of the Guarantor is bound or
affected, except in the case of each of clauses (ii) and (iii), such
conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as could not, individually or in the
aggregate, have or result in a Material Adverse Effect. The business of
the Guarantor is not being conducted in violation of any law, ordinance
or regulation of any governmental authority, except for violations
which, individually or in the aggregate, do not have a Material Adverse
Effect.
(d) Consents and Approvals. The Guarantor is not required to
obtain any consent, waiver, authorization or order of, or make any
filing or registration with, any court or other federal, state, local,
foreign or other governmental authority or other person in connection
with the execution, delivery and performance by the Guarantor of this
Guaranty.
(e) Purchase Agreement. The representations and warranties of
the Company set forth in the Purchase Agreement as they relate to such
Guarantor, each of which is hereby incorporated herein by reference,
are true and correct as of each time such representations are deemed to
be made pursuant to such Purchase Agreement, and the Purchasers shall
be entitled to rely on each of them as if they were fully set forth
herein, provided, that each reference in each such
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representation and warranty to the Company's knowledge shall, for the
purposes of this Section 3, be deemed to be a reference to such
Guarantor's knowledge.
(f) Foreign Law. Each Guarantor has consulted with appropriate
foreign legal counsel with respect to any of the above representations
for which non-U.S. law is applicable. Such foreign counsel have advised
each applicable Guarantor that such counsel knows of no reason why any
of the above representations would not be true and accurate. Such
foreign counsel were provided with copies of this Subsidiary Guarantee
and the Transaction Documents prior to rendering their advice.
4.COVENANTS.
(a) Each Guarantor covenants and agrees with the Purchasers
that, from and after the date of this Guarantee until the Obligations
shall have been paid in full, such Guarantor shall take, and/or shall
refrain from taking, as the case may be, each commercially reasonable
action that is necessary to be taken or not taken, as the case may be,
so that no Event of Default is caused by the failure to take such
action or to refrain from taking such action by such Guarantor.
(b) So long as any of the Obligations are outstanding, each
Guarantor will not directly or indirectly on or after the date of this
Guarantee:
i. except with the prior written consent of the Agent (as
defined in the Security Agreement), enter into, create, incur, assume
or suffer to exist any indebtedness for borrowed money of any kind,
including but not limited to, a guarantee, on or with respect to any of
its property or assets now owned or hereafter acquired or any interest
therein or any income or profits therefrom that is senior to, or pari
passu with, in any respect, such Guarantor's obligations hereunder;
ii. enter into, create, incur, assume or suffer to exist any
liens of any kind, on or with respect to any of its property or assets
now owned or hereafter acquired or any interest therein or any income
or profits therefrom that is senior to, in any respect, such
Guarantor's obligations hereunder, except for permitted liens;
iii. amend its certificate of incorporation, bylaws or other
charter documents so as to adversely affect any rights of the
Purchasers;
iv. repay, repurchase or offer to repay, repurchase or
otherwise acquire more than a de minimis number of shares of its Common
Stock or Common Stock Equivalents;
v. enter into any agreement with respect to any of the
foregoing; or
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vi. pay cash dividends on any equity securities of the
Company.
5. MISCELLANEOUS.
(a) Amendments in Writing. None of the terms or provisions of
this Guarantee may be waived, amended, supplemented or otherwise
modified except in writing by the Purchasers.
(b) Notices. All notices, requests and demands to or upon the
Purchasers or any Guarantor hereunder shall be effected in the manner
provided for in the Purchase Agreement; provided that any such notice,
request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 5(b).
(c) No Waiver By Course Of Conduct; Cumulative Remedies. The
Purchasers shall not by any act (except by a written instrument
pursuant to Section 5(a)), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have
acquiesced in any default under the Transaction Documents or Event of
Default. No failure to exercise, nor any delay in exercising, on the
part of the Purchasers, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any
right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Purchasers of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or
remedy which the Purchasers would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.
(d) Enforcement Expenses; Indemnification.
(i) Each Guarantor agrees to pay, or reimburse the
Purchasers for, all its costs and expenses incurred in
collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or
preserving any rights under this Guarantee and the
other Transaction Documents to which such Guarantor is
a party, including, without limitation, the reasonable
fees and disbursements of counsel to the Purchasers.
(ii) Each Guarantor agrees to pay, and to save the
Purchasers harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any
and all stamp, excise, sales or other taxes which may
be payable or
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determined to be payable in connection with any of the
transactions contemplated by this Guarantee.
(iii) Each Guarantor agrees to pay, and to save the
Purchasers harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and
administration of this Guarantee to the extent the
Company would be required to do so pursuant to the
Purchase Agreement.
(iv) The agreements in this Section shall survive repayment
of the Obligations and all other amounts payable under
the Purchase Agreement and the other Transaction
Documents.
(e) Successor and Assigns. This Guarantee shall be binding
upon the successors and assigns of each Guarantor and shall inure to
the benefit of the Purchasers and their respective successors and
assigns; provided that no Guarantor may assign, transfer or delegate
any of its rights or obligations under this Guarantee without the prior
written consent of the Purchasers.
(f) Set-Off. Each Guarantor hereby irrevocably authorizes the
Purchasers at any time and from time to time while an Event of Default
under any of the Transaction Documents shall have occurred and be
continuing, without notice to such Guarantor or any other Guarantor,
any such notice being expressly waived by each Guarantor, to set-off
and appropriate and apply any and all deposits, credits, indebtedness
or claims, in any currency, in each case whether direct or indirect,
absolute or contingent, matured or unmatured, at any time held or owing
by the Purchasers to or for the credit or the account of such
Guarantor, or any part thereof in such amounts as the Purchasers may
elect, against and on account of the obligations and liabilities of
such Guarantor to the Purchasers hereunder and claims of every nature
and description of the Purchasers against such Guarantor, in any
currency, whether arising hereunder, under the Purchase Agreement, any
other Transaction Document or otherwise, as the Purchasers may elect,
whether or not the Purchasers have made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. The Purchasers shall notify such Guarantor promptly of any
such set-off and the application made by the Purchasers of the proceeds
thereof, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the
Purchasers under this Section are in addition to other rights and
remedies(including, without limitation, other rights of set-off) which
the Purchasers may have.
(g) Counterparts. This Guarantee may be executed by one or
more of the parties to this Guarantee on any number of separate
counterparts (including by
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telecopy), and all of said counterparts taken together shall be deemed
to constitute one and the same instrument.
(h) Severability. Any provision of this Guarantee 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.
(i) Section Headings. The Section headings used in this
Guarantee are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the
interpretation hereof.
(j) Integration. This Guarantee and the other Transaction
Documents represent the agreement of the Guarantors and the Purchasers
with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Purchasers
relative to subject matter hereof and thereof not expressly set forth
or referred to herein or in the other Transaction Documents.
(k) Governing Law. THIS GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAWS.
(l) Submission to Jurisdictional; Waiver. Each Guarantor
hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action
or proceeding relating to this Guarantee and the other
Transaction Documents to which it is a party, or for
recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of
the Courts of the State of New York, located in New
York County, New York, the courts of the United States
of America for the Southern District of New York, and
appellate courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts and waives any objection that it
may now or hereafter have to the venue of any such
action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
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(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such
Guarantor at its address referred to in the Purchase
Agreement or at such other address of which the
Purchasers shall have been notified pursuant thereto;
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted
by law or shall limit the right to xxx in any other
jurisdiction; and
(v) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal
action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.
(m) Acknowledgements. Each Guarantor hereby acknowledges that:
(i) it has been advised by counsel in the negotiation,
execution and delivery of this Guarantee and the other
Transaction Documents to which it is a party;
(ii) the Purchasers have no fiduciary relationship with or
duty to any Guarantor arising out of or in connection
with this Guarantee or any of the other Transaction
Documents, and the relationship between the Guarantors,
on the one hand, and the Purchasers, on the other hand,
in connection herewith or therewith is solely that of
debtor and creditor; and
(iii) no joint venture is created hereby or by the other
Transaction Documents or otherwise exists by virtue of
the transactions contemplated hereby among the
Guarantors and the Purchasers.
(n) Additional Guarantors. The Company shall cause each of its
subsidiaries formed or acquired on or subsequent to the date hereof to
become a Guarantor for all purposes of this Guarantee by executing and
delivering an Assumption Agreement in the form of Annex 1 hereto.
(o) Release of Guarantors. Subject to Section 2.6, each
Guarantor will be released from all liability hereunder concurrently
with the repayment in full of all amounts owed under the Purchase
Agreement, the Debentures and the other Transaction Documents.
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(p) Seniority. The Obligations of each of the Guarantors
hereunder rank senior in priority to any other unsecured Debt (as
defined in the Debentures) of such Guarantor.
(q) Waiver of Jury Trial. EACH GUARANTOR AND, BY ACCEPTANCE OF
THE BENEFITS HEREOF, THE PURCHASERS, HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
to be duly executed and delivered as of the date first above written.
ARKADOS, INC.
By: /s/ Xxxx Xxxxxxxx
----------------------
Name: Xxxx Xxxxxxxx
Title: President and CEO
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SCHEDULE 1
GUARANTORS
The following are the names, notice addresses and jurisdiction
of organization of each Guarantor.
COMPANY
JURISDICTION OF OWNED BY
INCORPORATION PERCENTAGE
--------------- ----------
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Annex 1 to
SUBSIDIARY GUARANTEE
ASSUMPTION AGREEMENT, dated as of ____ __, ______ made by
______________________________, a ______________ corporation (the "Additional
Guarantor"), in favor of the Purchasers pursuant to the Purchase Agreement
referred to below. All capitalized terms not defined herein shall have the
meaning ascribed to them in such Purchase Agreement.
W I T N E S S E T H :
WHEREAS, XXXXxx.xxx, Inc., a Delaware corporation (the "Company") and
the Purchasers have entered into a Securities Purchase Agreement, dated as of
December ___, 2005 (as amended, supplemented or otherwise modified from time to
time, the "Purchase Agreement");
WHEREAS, in connection with the Purchase Agreement, the Company and its
Subsidiaries (other than the Additional Guarantor) have entered into the
Subsidiary Guarantee, dated as of June ___, 2006 (as amended, supplemented or
otherwise modified from time to time, the "Guarantee") in favor of the
Purchasers;
WHEREAS, the Purchase Agreement requires the Additional Guarantor to
become a party to the Guarantee; and
WHEREAS, the Additional Guarantor has agreed to execute and deliver
this Assumption Agreement in order to become a party to the Guarantee;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee. By executing and delivering this Assumption Agreement,
the Additional Guarantor, as provided in Section 5.14 of the Guarantee, hereby
becomes a party to the Guarantee as a Guarantor thereunder with the same force
and effect as if originally named therein as a Guarantor and, without limiting
the generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Guarantor thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in Schedule 1 to the
Guarantee. The Additional Guarantor hereby represents and warrants that each of
the representations and warranties contained in Section 3 of the Guarantee is
true and correct on and as the date hereof as to such Additional Guarantor
(after giving effect to this Assumption Agreement) as if made on and as of such
date.
2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONALGUARANTOR]
By:
Name:
Title:
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