EXECUTION COPY
Exhibit 10.9
AMENDED AND RESTATED GUARANTY
AMENDED AND RESTATED GUARANTY, dated as of July 28, 2008 (amended,
restated, supplemented or otherwise modified, this "GUARANTY"), made by each of
the undersigned (together with any other Subsidiary (as defined below) of the
Company referred to below that may from time to time become a Guarantor
hereunder, each a "GUARANTOR", and collectively, the "GUARANTORS"), in favor of
Castlerigg Master Investment Ltd., a company organized under the laws of the
British Virgin Islands, in its capacity as collateral agent (in such capacity,
the "COLLATERAL AGENT") for the "Buyers" (as defined below) party to the
Securities Purchase Agreements referred to below.
W I T N E S S E T H :
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WHEREAS, Raptor Networks Technology, Inc., a Colorado corporation (the
"COMPANY") and each party listed as a "Buyer" on the Schedule of Buyers attached
to the 2006 SPA referred to below (collectively, the "2006 BUYERS") are parties
to a Securities Purchase Agreement, dated as of July 30, 2006 (as amended,
restated, supplemented or otherwise modified from time to time, the "2006 SPA")
pursuant to which the Company has sold, and the 2006 Buyers have purchased, the
notes issued pursuant thereto (as such notes may be amended, restated, replaced
or otherwise modified from time to time in accordance with the terms thereof,
collectively, the "2006 NOTES");
WHEREAS, the Company and each party listed as a "Buyer" on the Schedule
of Buyers attached to the 2007 SPA referred to below (collectively, the "2007
BUYERS") are parties to a Securities Purchase Agreement, dated as of July 31,
2007 (as amended, restated, supplemented or otherwise modified from time to
time, the "2007 SPA") pursuant to which the Company has sold, and the 2007
Buyers have purchased, the notes issued pursuant thereto (as such notes may be
amended, restated, replaced or otherwise modified from time to time in
accordance with the terms thereof, collectively, the "2007 NOTES");
WHEREAS, the Company and each party listed as a "Buyer" on the Schedule
of Buyers attached to the March 2008 SPA referred to below (collectively, the
"MARCH 2008 BUYERS") are parties to the Securities Purchase Agreement, dated as
of March 31, 2008 (as amended, restated, supplemented or otherwise modified from
time to time, the "MARCH 2008 SPA"), pursuant to which the Company has sold, and
the March 2008 Buyers have purchased, the notes issued pursuant thereto (as such
notes may be amended, restated, replaced or otherwise modified from time to time
in accordance with the terms thereof, collectively, the "MARCH 2008 NOTES");
WHEREAS, in connection with the March 2008 SPA and the 2007 SPA and to
secure the 2007 Notes and the March 2008 Notes issued thereunder, (a) each
Guarantor has executed and delivered the Guaranty, dated as of March 31, 2008
(the "ORIGINAL GUARANTY"), pursuant to which such Guarantor has guaranteed all
of the obligations (collectively, the "ORIGINAL SECURED OBLIGATIONS") of the
Company under the 2007 SPA and the March 2008 SPA and the other "Transaction
Documents" (as such term is defined in each of the 2007 SPA and the March 2008
SPA; such Transaction Documents as amended, restated, supplemented or otherwise
modified, are hereinafter referred to as the "ORIGINAL SECURED TRANSACTION
DOCUMENTS"), (b) the Guarantors and the Company have executed and delivered the
Pledge Agreement, dated as of March 31, 2008 (the "ORIGINAL PLEDGE AGREEMENT"),
pursuant to which the Guarantors and the Company have granted to the Collateral
Agent, for the benefit of the 2007 Buyers and the March 2008 Buyers, a perfected
first priority security interest in and a lien on the Collateral described in
the Original Pledge Agreement and (c) the Guarantors and the Company have
executed and delivered the Security Agreement, dated as of March 31, 2008 (the
"ORIGINAL SECURITY AGREEMENT" and, together with the Original Guaranty and the
Original Pledge Agreement, collectively, the "ORIGINAL SECURITY DOCUMENTS"),
pursuant to which the Guarantor and the Company have granted to the Collateral
Agent, for the benefit of the 2007 Buyers and the March 2008 Buyers, a perfected
first priority security interest in and a lien on the Collateral described in
the Original Security Agreement;
WHEREAS, the Company and each party listed as a "Buyer" on the Schedule
of Buyers attached to the July 2008 SPA referred to below (collectively, the
"JULY 2008 BUYERS" and, together with the 2006 Buyers, the 2007 Buyers and the
March 2008 Buyers, each a "BUYER" and collectively, the "BUYERS") intend to
enter into that certain Securities Purchase Agreement, dated as of July __, 2008
(as amended, restated, supplemented or otherwise modified from time to time, the
"JULY 2008 SPA" and, together with the 2006 SPA, the 2007 SPA and the March 2008
SPA, each a "PURCHASE AGREEMENT", and collectively the "PURCHASE AGREEMENTS"),
pursuant to which the Company will sell, and the 2008 Buyers will purchase, the
notes issued pursuant thereto (as such notes may be amended, restated, replaced
or otherwise modified from time to time in accordance with the terms thereof,
collectively, the "JULY 2008 NOTES" and, together with the 2006 Notes, the 2007
Notes and the March 2008 Notes, each a "NOTE" and collectively, the "NOTES");
WHEREAS, it is a condition precedent to the July 2008 Buyers purchasing
the July 2008 Notes that (a) each Original Security Document shall have been
amended and restated in its entirety to secure the Original Secured Obligations
as well as all of the Company's obligations under the 2006 SPA, the 2006 Notes,
the July 2008 SPA, the July 2008 Notes and the other "Transaction Documents" (as
defined in the 2006 SPA and the July 2008 SPA; such Transaction Documents, as
amended, restated, supplemented or otherwise modified, together with the
Original Secured Transaction Documents, collectively the "TRANSACTION
DOCUMENTS") and (b) each of the Guarantors and, with respect to the Security
Agreement and the Pledge Agreement referred to below, the Company shall have
executed and delivered to the Collateral Agent for the benefit of itself and the
Buyers (i) this Guaranty, amending and restating the Original Guaranty and
guaranteeing all Obligations (as defined in the Security Agreement), (ii) the
Amended and Restated Security Agreement, dated as of the date hereof (the
"SECURITY Agreement"), amending and restating the Original Security Agreement
and granting the Collateral Agent a perfected, first priority continuing
security interest in, and a lien on, such Guarantor's and the Company's interest
in the Collateral (as defined below), and (iii) the Amended and Restated Pledge
Agreement, dated as of the date hereof (as amended, restated, supplemented or
otherwise modified, the "PLEDGE AGREEMENT"), amending and restating the Original
Pledge Agreement and granting the Collateral Agent a perfected, first priority
continuing security interest in, and a lien on, such Guarantor's and the
Company's personal property described in the Pledge Agreement;
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WHEREAS, the Guarantors and the Company are mutually dependent on each
other in the conduct of their respective businesses as an integrated operation,
with the credit needed from time to time by each Guarantor and the Company often
being provided through financing obtained by the Company and the Guarantors and
the ability to obtain such financing being dependent on the successful
operations of all of the Company and the Guarantors as a whole; and
WHEREAS, each Guarantor has determined that the execution, delivery and
performance of this Guaranty directly benefits, and is in the best interest of,
such Guarantor.
NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Buyers to perform under the Purchase
Agreements, each Guarantor hereby agrees with Collateral Agent as follows:
SECTION 1. DEFINITIONS. Reference is hereby made to the Purchase
Agreements and the Notes for a statement of the terms thereof. All capitalized
terms used in this Guaranty, which are defined in the Purchase Agreements or the
Notes and not otherwise defined herein, shall have the same meanings herein as
set forth therein.
SECTION 2. GUARANTY. The Guarantors, jointly and severally, hereby
unconditionally and irrevocably, guaranty the punctual payment, as and when due
and payable, by stated maturity or otherwise, of all Obligations (as defined in
the Security Agreement) of the Company from time to time owing by it in respect
of the Purchase Agreements, the Notes and the other Transaction Documents,
including, without limitation, all interest that accrues after the commencement
of any Insolvency Proceeding (as defined in the Security Agreement) of the
Company or any Guarantor, whether or not the payment of such interest is
unenforceable or is not allowable due to the existence of such Insolvency
Proceeding, and all fees, commissions, expense reimbursements, indemnifications
and all other amounts due or to become due under any of the Transaction
Documents (such obligations, to the extent not paid by the Company, being the
"GUARANTEED OBLIGATIONS"), and agrees to pay any and all expenses (including
reasonable counsel fees and expenses) reasonably incurred by the Collateral
Agent in enforcing any rights under this Guaranty. Without limiting the
generality of the foregoing, each Guarantor's liability hereunder shall extend
to all amounts that constitute part of the Guaranteed Obligations and would be
owed by the Company to the Collateral Agent under the Purchase Agreements and
the Notes but for the fact that they are unenforceable or not allowable due to
the existence of an Insolvency Proceeding involving any Guarantor or the Company
(each, a "TRANSACTION PARTY").
SECTION 3. GUARANTY ABSOLUTE; CONTINUING GUARANTY; ASSIGNMENTS.
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(a) The Guarantors, jointly and severally, guaranty that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the
Transaction Documents, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Collateral Agent with respect thereto. The obligations of each
Guarantor under this Guaranty are independent of the Guaranteed Obligations, and
a separate action or actions may be brought and prosecuted against any Guarantor
to enforce such obligations, irrespective of whether any action is brought
against any other Transaction Party or whether any other Transaction Party is
joined in any such action or actions. The liability of any Guarantor under this
Guaranty shall be irrevocable, absolute and unconditional irrespective of, and
each Guarantor hereby irrevocably waives, to the extent permitted by law, any
defenses it may now or hereafter have in any way relating to, any or all of the
following:
(i) any lack of validity or enforceability of any Transaction
Document or any agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from any Transaction
Document, including, without limitation, any increase in the Guaranteed
Obligations resulting from the extension of additional credit to any Transaction
Party or otherwise;
(iii) any taking, exchange, release or non-perfection of any
Collateral (as defined in the Security Agreement), or any taking, release or
amendment or waiver of or consent to departure from any other guaranty, for all
or any of the Guaranteed Obligations;
(iv) any change, restructuring or termination of the corporate,
limited liability company or partnership structure or existence of any
Transaction Party; or
(v) any other circumstance (including any statute of limitations)
or any existence of or reliance on any representation by the Collateral Agent
that might otherwise constitute a defense available to, or a discharge of, any
Transaction Party or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Collateral Agent or any other Person upon
the insolvency, bankruptcy or reorganization of any Transaction Party or
otherwise, all as though such payment had not been made.
(b) This Guaranty is a continuing guaranty and shall (i) remain in full
force and effect until Satisfaction in Full of the Obligations (as defined in
the Security Agreement, "SATISFACTION IN FULL") and shall not terminate for any
reason prior to the Satisfaction in Full of the Obligations and (ii) be binding
upon each Guarantor and its respective successors and assigns. This Guaranty
shall inure to the benefit of and be enforceable by the Collateral Agent and its
successors, and permitted pledgees, transferees and assigns. Without limiting
the generality of the foregoing sentence, the Collateral Agent or any Buyer may
pledge, assign or otherwise transfer all or any portion of its rights and
obligations under and subject to the terms of any Transaction Document to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Collateral Agent or Buyer herein or
otherwise, in each case as such pledge, assignment or transfer is permitted
pursuant to the applicable Transaction Document. Notwithstanding the foregoing
and for the avoidance of doubt, this Guaranty will expire and each Guarantor
will be released from its obligation hereunder upon the Satisfaction in Full of
the Obligations.
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SECTION 4. WAIVERS. To the extent permitted by applicable law, each
Guarantor hereby waives promptness, diligence, notice of acceptance and any
other notice with respect to any of the Guaranteed Obligations and this Guaranty
and any requirement that the Collateral Agent exhaust any right or take any
action against any other Transaction Party or any other Person or any
Collateral. Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated herein and that the waiver
set forth in this SECTION 4 is knowingly made in contemplation of such benefits.
The Guarantors hereby waive any right to revoke this Guaranty, and acknowledge
that this Guaranty is continuing in nature and applies to all Guaranteed
Obligations, whether existing now or in the future.
SECTION 5. SUBROGATION. No Guarantor may exercise any rights that it
may now or hereafter acquire against any Transaction Party or any other
guarantor that arise from the existence, payment, performance or enforcement of
any Guarantor's obligations under this Guaranty, including, without limitation,
any right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of the
Collateral Agent against any Transaction Party or any other guarantor or any
Collateral, whether or not such claim, remedy or right arises in equity or under
contract, statute or common law, including, without limitation, the right to
take or receive from any Transaction Party or any other guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security solely on account of such claim, remedy or right, unless and
until all of the Guaranteed Obligations (other than inchoate indemnity
obligations) and all other amounts payable under this Guaranty (other than
inchoate indemnity obligations) shall have indefeasibly been paid or otherwise
satisfied in full in accordance with the terms of the Transaction Documents. If
any amount shall be paid to a Guarantor in violation of the immediately
preceding sentence at any time prior to the later of the satisfaction in full of
the Guaranteed Obligations and all other amounts payable under this Guaranty,
such amount shall be held in trust for the benefit of the Collateral Agent and
shall forthwith be paid to the Collateral Agent to be credited and applied to
the Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the Transaction
Document, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Guaranty thereafter arising. If (a) any Guarantor
shall make payment to the Collateral Agent of all or any part of the Guaranteed
Obligations, and (b) all of the Guaranteed Obligations (other than inchoate
indemnity obligations) and all other amounts payable under this Guaranty (other
than inchoate indemnity obligations) shall indefeasibly be satisfied in full,
the Collateral Agent will, at such Guarantor's request and expense, execute and
deliver to such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Guaranteed Obligations resulting from such
payment by such Guarantor.
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SECTION 6. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Each Guarantor hereby represents and warrants as of the date first
written above as follows:
(i) Each Guarantor (A) is a corporation, limited liability company
or limited partnership duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization as set forth on the
signature pages hereto, (B) has all requisite corporate, limited liability
company or limited partnership power and authority to conduct its business as
now conducted and as presently contemplated and to execute and deliver this
Guaranty, and to consummate the transactions contemplated hereby and thereby and
(C) is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary
except where the failure to be so qualified would not result in a Material
Adverse Effect.
(ii) The execution, delivery and performance by each Guarantor of
this Guaranty (A) have been duly authorized by all necessary corporate, limited
liability company or limited partnership action, (B) do not and will not
contravene its charter or by-laws, its limited liability company or operating
agreement or its certificate of partnership or partnership agreement, as
applicable, or any applicable law or any contractual restriction binding on such
Guarantor or its properties do not and will not result in or require the
creation of any lien (other than pursuant to any Transaction Document) upon or
with respect to any of its properties, and (C) do not and will not result in any
default, noncompliance, suspension, revocation, impairment, forfeiture or
nonrenewal of any material permit, license, authorization or approval applicable
to it or its operations or any of its properties.
(iii) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority is required in connection
with the due execution, delivery and performance by each Guarantor of this
Guaranty (other than expressly provided for in this Guaranty).
(iv) This Guaranty, when delivered, will be, a legal, valid and
binding obligation of such Guarantor, enforceable against such Guarantor in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or
other similar laws and equitable principles (regardless of whether enforcement
is sought in equity or at law).
(v) There is no pending or, to the best knowledge of any
Guarantor, threatened action, suit or proceeding against such Guarantor or to
which any of the properties of such Guarantor is subject, before any court or
other governmental authority or any arbitrator that (A) if adversely determined,
could reasonably be expected to have a Material Adverse Effect or (B) relates to
this Guaranty or any of the other Transaction Documents to which such Guarantor
is a party or any transaction contemplated hereby or thereby.
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(vi) Each Guarantor (A) has read and understands the terms and
conditions of the Purchase Agreements and the other Transaction Documents, and
(B) now has and will continue to have independent means of obtaining information
concerning the affairs, financial condition and business of the Company and the
other Transaction Parties, and has no need of, or right to obtain from any
Buyer, any credit or other information concerning the affairs, financial
condition or business of the Company or the other Transaction Parties that may
come under the control of any Buyer.
(b) Each Guarantor covenants and agrees that until the Satisfaction in
Full of the Obligations, it will comply with each of the covenants (except to
the extent applicable only to a public company) which are set forth in Section 4
of the Purchase Agreements as if such Guarantor were a party thereto.
SECTION 7. RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default (as defined in the Notes), any Buyer may,
and is hereby authorized to, at any time and from time to time, without notice
to the Guarantors (any such notice being expressly waived by each Guarantor) and
to the fullest extent permitted by law, set-off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by any Buyer to or for the credit or the
account of any Guarantor against any and all obligations of the Guarantors now
or hereafter existing under this Guaranty or any other Transaction Document,
irrespective of whether or not any Buyer shall have made any demand under this
Guaranty or any other Transaction Document and although such obligations may be
contingent or unmatured. Each Buyer agrees to notify the relevant Guarantor
promptly after any such set-off and application made by such Buyer, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of any Buyer under this SECTION 7 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which such Buyer may have under this Guaranty or any other
Transaction Document in law or otherwise.
SECTION 8. NOTICES, ETC. All notices and other communications provided
for hereunder shall be in writing and shall be mailed, telecopied or delivered,
if to any Guarantor, to the address of the Company set forth in the Purchase
Agreements, or if to the Collateral Agent or any Buyer, to it at its respective
address set forth in the Purchase Agreements; or as to any Person at such other
address as shall be designated by such Person in a written notice to such other
Person complying as to delivery with the terms of this SECTION 8. All such
notices and other communications shall be effective (i) if mailed (by certified
mail, postage prepaid and return receipt requested), when received or three
Business Days after deposited in the mails, whichever occurs first; (ii) if
telecopied, when transmitted and confirmation is received, provided same is on a
Business Day and, if not, on the next Business Day; or (iii) if delivered by
hand, upon delivery, provided same is on a Business Day and, if not, on the next
Business Day. For the avoidance of doubt, the Subsidiaries, as Guarantors,
hereby appoint the Company as its agent for receipt of service of process and
all notices and other communications in the United States at the address
specified in the Purchase Agreements.
SECTION 9. CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER
TRANSACTION DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX IN
THE COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY, EACH
GUARANTOR HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH GUARANTOR HEREBY
IRREVOCABLY APPOINTS THE COMPANY AS ITS AGENT FOR SERVICE OF PROCESS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING AND FURTHER IRREVOCABLY CONSENTS TO THE SERVICE
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OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, AT ITS ADDRESS SET FORTH IN THE PURCHASE AGREEMENTS, SUCH
SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT TO SERVICE OF PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST EACH GUARANTOR IN ANY OTHER JURISDICTION. ANY GUARANTOR HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY
CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH GUARANTOR HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
GUARANTY AND THE OTHER TRANSACTION DOCUMENTS.
SECTION 10. WAIVER OF JURY TRIAL, ETC. EACH GUARANTOR HEREBY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING
ANY RIGHTS UNDER THIS GUARANTY OR THE OTHER TRANSACTION DOCUMENTS, OR UNDER ANY
AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR
WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR
ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS
GUARANTY OR THE OTHER TRANSACTION DOCUMENTS, AND AGREES THAT ANY SUCH ACTION,
PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
EACH GUARANTOR CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF
THE COLLATERAL AGENT OR ANY BUYER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
ANY BUYER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM,
SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH GUARANTOR HEREBY ACKNOWLEDGES THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE COLLATERAL AGENT ENTERING INTO
THIS GUARANTY.
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SECTION 11. TAXES.
(a) All payments made by any Guarantor hereunder or under any other
Transaction Document shall be made in accordance with the terms of the
respective Transaction Document and shall be made without set-off, counterclaim,
deduction or other defense. All such payments shall be made free and clear of
and without deduction for any present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
EXCLUDING taxes imposed on the net income of any Buyer by the jurisdiction in
which such Buyer is organized or where it has its principal lending office (all
such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities, collectively or individually, "TAXES"). If any Guarantor shall be
required to deduct or to withhold any Taxes from or in respect of any amount
payable hereunder or under any other Transaction Document:
(i) the amount so payable shall be increased to the extent
necessary so that after making all required deductions and withholdings
(including Taxes on amounts payable to any Buyer pursuant to this sentence) each
Buyer receives an amount equal to the sum it would have received had no such
deduction or withholding been made,
(ii) such Guarantor shall make such deduction or withholding,
(iii) such Guarantor shall pay the full amount deducted or
withheld to the relevant taxation authority in accordance with applicable law,
and
(iv) as promptly as possible thereafter, such Guarantor shall send
the Buyers an official receipt (or, if an official receipt is not available,
such other documentation as shall be reasonably satisfactory to the Collateral
Agent, as the case may be) showing payment of such Taxes. In addition, each
Guarantor agrees to pay any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies that arise from any
payment made hereunder or from the execution, delivery, registration or
enforcement of, or otherwise with respect to, this Guaranty or any other
Transaction Document (collectively, "OTHER TAXES").
(b) Each Guarantor hereby indemnifies and agrees to hold the Collateral
Agent and each Buyer (each an "INDEMNIFIED PARTY") harmless from and against
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this SECTION 11) paid by
any Indemnified Party as a result of any payment made hereunder or from the
execution, delivery, registration or enforcement of, or otherwise with respect
to, this Guaranty or any other Transaction Document, and any liability
(including penalties, interest and expenses for nonpayment, late payment or
otherwise) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. This indemnification shall be
paid within 30 days from the date on which the Collateral Agent or such Buyer
makes written demand therefor, which demand shall identify the nature and amount
of such Taxes or Other Taxes.
(c) If any Guarantor fails to perform any of its obligations under this
SECTION 11, such Guarantor shall indemnify the Collateral Agent and each Buyer
for any taxes, interest or penalties that may become payable as a result of any
such failure. The obligations of the Guarantors under this SECTION 11 shall
survive the termination of this Guaranty and the payment of the Obligations and
all other amounts payable hereunder.
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SECTION 12. MISCELLANEOUS.
(a) Each Guarantor will make each payment hereunder in lawful money of
the United States of America and in immediately available funds to each Buyer,
at such address specified by such Buyer from time to time by notice to the
Guarantors.
(b) No amendment or waiver of any provision of this Guaranty and no
consent to any departure by any Guarantor therefrom shall in any event be
effective unless the same shall be in writing and signed by each Guarantor and
such Buyers as are required pursuant to SECTION 9(e) of the Purchase Agreements,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
(c) No failure on the part of any Buyer to exercise, and no delay in
exercising, any right hereunder or under any other Transaction Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder or under any Transaction Document preclude any other or further
exercise thereof or the exercise of any other right. The rights and remedies of
the Collateral Agent and the Buyers provided herein and in the other Transaction
Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of the Collateral Agent and the
Buyers under any Transaction Document against any party thereto are not
conditional or contingent on any attempt by the Collateral Agent or any Buyer to
exercise any of their respective rights under any other Transaction Document
against such party or against any other Person.
(d) Any provision of this Guaranty that 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
portions hereof or affecting the validity or enforceability of such provision in
any other jurisdiction.
(e) This Guaranty shall (i) be binding on each Guarantor and its
respective successors and assigns, and (ii) inure, together with all rights and
remedies of the Collateral Agent hereunder, to the benefit of the Collateral
Agent, the Buyers and their respective successors, transferees and assigns.
Without limiting the generality of clause (ii) of the immediately preceding
sentence, the Collateral Agent and any Buyer may assign or otherwise transfer
its rights and obligations under the Purchase Agreements or any other
Transaction Document to any other Person in accordance with the terms thereof,
and such other Person shall thereupon become vested with all of the benefits in
respect thereof granted to the Collateral Agent or such Buyer, as the case may
be, herein or otherwise. None of the rights or obligations of any Guarantor
hereunder may be assigned or otherwise transferred without the prior written
consent of such Buyers as are required pursuant to SECTION 9(e) of the Purchase
Agreements.
(f) This Guaranty, along with the Purchase Agreements and the other
Transaction Documents, reflects the entire understanding of the transaction
contemplated hereby and shall not be contradicted or qualified by any other
agreement, oral or written, entered into before the date hereof.
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(g) Section headings herein are included for convenience of reference
only and shall not constitute a part of this Guaranty for any other purpose.
(h) This Guaranty constitutes an amendment and restatement of the
Original Guaranty. Notwithstanding anything to the contrary contained herein,
the execution and delivery of this Guaranty and the consummation of the
transactions contemplated hereby are not intended by the parties to be, and
shall not constitute, a novation or an accord and satisfaction of the
Obligations or any other obligations owing to Collateral Agent or the Buyers
under the Original Guaranty or any other Original Secured Transaction Document.
Instead it is the express intention of the parties hereto to reaffirm the
indebtedness created under the Original Secured Transaction Documents, the 2006
SPA and the 2006 Notes. The Transaction Documents and all agreements,
instruments and documents executed or delivered in connection with any of the
foregoing shall each be deemed to be amended in the extent necessary to give
effect to the provisions of this Guaranty.
(i) THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED THEREIN WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed by its respective duly authorized officer, as of the date first above
written.
RAPTOR NETWORKS TECHNOLOGY
INC., a California Corporation
By: Xxxxxx X. Xxxxxxxxxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxxxxxxxxx
Title: Chairman & CEO
ACCEPTED BY:
CASTLERIGG MASTER INVESTMENTS
LTD.
BY: XXXXXXX ASSET MANAGEMENT CORP.
By: /s/ Xxxxxxx X'Xxxxx
------------------------------------------
Name: Xxxxxxx X'Xxxxx
Title: Chief Financial Officer
RAPTOR NETWORKS TECHNOLOGY, INC., a Colorado corporation
By: /s/Xxxxxx X. Xxxxxxxxxxxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxxxxxx
TITLE: Chairman & CEO
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