Exhibit 10.7
SUBSIDIARY GUARANTY
New York, New York June 25, 2004
FOR VALUE RECEIVED, and in consideration of note purchases from, loans
made or to be made or credit otherwise extended or to be extended by Laurus
Master Fund, Ltd. ("Laurus") to or for the account of DataLogic International,
Inc., a Delaware corporation ("Debtor"), from time to time and at any time and
for other good and valuable consideration and to induce Xxxxxx, in its
discretion, to purchase such notes, make such loans or extensions of credit
and to make or grant such renewals, extensions, releases of collateral or
relinquishments of legal rights as Xxxxxx may deem advisable, each of the
undersigned (and each of them if more than one, the liability under this
Guaranty being joint and several) (jointly and severally referred to as
"Guarantors " or "the undersigned") unconditionally guaranties to Laurus, its
successors, endorsees and assigns the prompt payment when due (whether by
acceleration or otherwise) of all present and future obligations and
liabilities of any and all kinds of Debtor to Laurus and of all instruments of
any nature evidencing or relating to any such obligations and liabilities upon
which Debtor or one or more parties and Debtor is or may become liable to
Laurus, whether incurred by Debtor as maker, endorser, drawer, acceptor,
guarantors , accommodation party or otherwise, and whether due or to become
due, secured or unsecured, absolute or contingent, joint or several, and
however or whenever acquired by Laurus, whether arising under, out of, or in
connection with (i) that certain Securities Purchase Agreement dated as of the
date hereof by and between the Debtor and Laurus (the "Securities Purchase
Agreement") and (ii) each Related Agreement referred to in the Securities
Purchase Agreement, as each may be amended, modified, restated or supplemented
from time to time, are collectively referred to herein as the "Documents"), or
any documents, instruments or agreements relating to or executed in connection
with the Documents or any documents, instruments or agreements referred to
therein or otherwise, or any other indebtedness, obligations or liabilities of
the Debtor to Laurus, whether now existing or hereafter arising, direct or
indirect, liquidated or unliquidated, absolute or contingent, due or not due
and whether under, pursuant to or evidenced by a note, agreement, guaranty,
instrument or otherwise (all of which are herein collectively referred to as
the "Obligations"), and irrespective of the genuineness, validity, regularity
or enforceability of such Obligations, or of any instrument evidencing any of
the Obligations or of any collateral therefor or of the existence or extent of
such collateral, and irrespective of the allowability, allowance or
disallowance of any or all of the Obligations in any case commenced by or
against Debtor under Title 11, United States Code, including, without
limitation, obligations or indebtedness of Debtor for post-petition interest,
fees, costs and charges that would have accrued or been added to the
Obligations but for the commencement of such case. Terms not otherwise
defined herein shall have the meaning assigned such terms in the Securities
Purchase Agreement. 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, or any other agreement with Debtor or with any
other party to or person liable on any of the Obligations, or interested
therein, for the extension, renewal, payment, compromise, discharge or release
thereof, in whole or in part, or for any modification of the terms thereof or
of any agreement between Laurus and Debtor or any such other party or person,
or make any election of rights Laurus may deem desirable under the United
States Bankruptcy Code, as amended, or any other federal or state bankruptcy,
reorganization, moratorium or insolvency law relating to or affecting the
enforcement of creditors' rights generally (any of the foregoing, an
"Insolvency Law") without in any way impairing or affecting this Guaranty.
This instrument shall be effective regardless of the subsequent incorporation,
merger or consolidation of Debtor, or any change in the composition, nature,
personnel or location of Debtor and shall extend to any successor entity to
Debtor, including a debtor in possession or the like under any Insolvency Law.
2. Guaranty Absolute. Subject to Section 5(c), each of the undersigned
jointly and severally guarantees that the Obligations will be paid strictly in
accordance with the terms of the Documents and/or any other document,
instrument or agreement creating or evidencing the Obligations, regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of Debtor with respect thereto.
Guarantors hereby knowingly accept the full range of risk encompassed within a
contract of "continuing guaranty" which risk includes the possibility that
Debtor will contract additional indebtedness for which Guarantors may be
liable hereunder after Xxxxxx's financial condition or ability to pay its
lawful debts when they fall due has deteriorated, whether or not Debtor has
properly authorized incurring such additional indebtedness. The undersigned
acknowledge that (i) no oral representations, including any representations to
extend credit or provide other financial accommodations to Debtor, have been
made by Xxxxxx to induce the undersigned to enter into this Guaranty and (ii)
any extension of credit to the Debtor shall be governed solely by the
provisions of the Documents. The liability of each of the undersigned under
this Guaranty shall be absolute and unconditional, in accordance with its
terms, and shall remain in full force and effect without regard to, and shall
not be released, suspended, discharged, terminated or otherwise affected by,
any circumstance or occurrence whatsoever, including, without limitation: (a)
any waiver, indulgence, renewal, extension, amendment or modification of or
addition, consent or supplement to or deletion from or any other action or
inaction under or in respect of the Documents or any other instruments or
agreements relating to the Obligations or any assignment or transfer of any
thereof, (b) any lack of validity or enforceability of any Document or other
documents, instruments or agreements relating to the Obligations or any
assignment or transfer of any thereof, (c) any furnishing of any additional
security to Laurus or its assignees or any acceptance thereof or any release
of any security by Laurus or its assignees, (d) any limitation on any party's
liability or obligation under the Documents or any other documents,
instruments or agreements relating to the Obligations or any assignment or
transfer of any thereof or any invalidity or unenforceability, in whole or in
part, of any such document, instrument or agreement or any term thereof, (e)
any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to Debtor, or any
action taken with respect to this Guaranty by any trustee or receiver, or by
any court, in any such proceeding, whether or not the undersigned shall have
notice or knowledge of any of the foregoing, (f) any exchange, release or
nonperfection of any collateral, or any release, or amendment or waiver of or
consent to departure from any guaranty or security, for all or any of the
Obligations or (g) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the undersigned. Any amounts due
from the undersigned to Laurus shall bear interest until such amounts are paid
in full at the highest rate then applicable to the Obligations. Obligations
include post-petition interest whether or not allowed or allowable.
3. Waivers.
(a) This Guaranty is a guaranty of payment and not of collection.
Laurus shall be under no obligation to institute suit, exercise rights or
remedies or take any other action against Debtor or any other person liable
with respect to any of the Obligations or resort to any collateral security
held by it to secure any of the Obligations as a condition precedent to the
undersigned being obligated to perform as agreed herein and each of the
Guarantors hereby waives any and all rights which it may have by statute or
otherwise which would require Laurus to do any of the foregoing. Each of the
Guarantors further consents and agrees that Xxxxxx shall be under no
obligation to marshal any assets in favor of Guarantors, or against or in
payment of any or all of the Obligations. The undersigned hereby waives all
suretyship defenses and any rights to interpose any defense, counterclaim or
offset of any nature and description which the undersigned may have or which
may exist between and among Laurus, Debtor and/or the undersigned with respect
to the undersigned's obligations under this Guaranty, or which Debtor may
assert on the underlying debt, including but not limited to failure of
consideration, breach of warranty, fraud, payment (other than cash payment in
full of the Obligations), statute of frauds, bankruptcy, infancy, statute of
limitations, accord and satisfaction, and usury.
(b) Each of the undersigned further waives (i) notice of the
acceptance of this Guaranty, of the making of any such loans or extensions of
credit, and of all notices and demands of any kind to which the undersigned
may be entitled, including, without limitation, notice of adverse change in
Debtor's financial condition or of any other fact which might materially
increase the risk of the undersigned and (ii) presentment to or demand of
payment from anyone whomsoever liable upon any of the Obligations, protest,
notices of presentment, non-payment or protest and notice of any sale of
collateral security or any default of any sort.
(c) Notwithstanding any payment or payments made by the
undersigned hereunder, or any setoff or application of funds of the
undersigned by Xxxxxx, the undersigned shall not be entitled to be subrogated
to any of the rights of Xxxxxx against Debtor or against any collateral or
guarantee or right of offset held by Xxxxxx for the payment of the
Obligations, nor shall the undersigned seek or be entitled to seek any
contribution or reimbursement from Debtor in respect of payments made by the
undersigned hereunder, until all amounts owing to Laurus by Debtor on account
of the Obligations are paid in full and Laurus' obligation to extend credit
pursuant to the Documents have been terminated. If, notwithstanding the
foregoing, any amount shall be paid to the undersigned on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full and Laurus' obligation to extend credit pursuant to the Documents
shall not have been terminated, such amount shall be held by the undersigned
in trust for Laurus, segregated from other funds of the undersigned, and shall
forthwith upon, and in any event within two (2) business days of, receipt by
the undersigned, be turned over to Laurus in the exact form received by the
undersigned (duly endorsed by the undersigned to Laurus, if required), to be
applied against the Obligations, whether matured or unmatured, in such order
as Laurus may determine, subject to the provisions of the Documents. Any and
all present and future debts and obligations of Debtor to any of the
undersigned are hereby waived and postponed in favor of, and subordinated to
the full payment and performance of, all present and future debts and
Obligations of Debtor to Xxxxxx.
4. Security. All sums at any time to the credit of the undersigned and
any property of the undersigned in Laurus' possession or in the possession of
any bank, financial institution or other entity that directly or indirectly,
through one or more intermediaries, controls or is controlled by, or is under
common control with, Laurus (each such entity, an "Affiliate") shall be deemed
held by Laurus or such Affiliate, as the case may be, as security for any and
all of the undersigned's obligations to Laurus and to any Affiliate of Laurus,
no matter how or when arising and whether under this or any other instrument,
agreement or otherwise.
5. Representations and Warranties. Each of the undersigned
respectively, hereby jointly and severally represents and warrants (all of
which representations and warranties shall survive until all Obligations are
indefeasibly satisfied in full and the Documents have been irrevocably
terminated), that:
(a) Corporate Status. It is a corporation, partnership or limited
liability company, as the case may be, duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization indicated on
the signature page hereof and has full power, authority and legal right to own
its property and assets and to transact the business in which it is engaged.
(b) Authority and Execution. It has full power, authority and
legal right to execute and deliver, and to perform its obligations under, this
Guaranty and has taken all necessary corporate, partnership or limited
liability company, as the case may be, action to authorize the execution,
delivery and performance of this Guaranty.
(c) Legal, Xxxxx and Binding Character. This Guaranty constitutes
its legal, valid and binding obligation enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting the enforcement of creditor's rights and general principles of
equity that restrict the availability of equitable or legal remedies.
(d) Violations. The execution, delivery and performance of this
Guaranty will not violate any requirement of law applicable to it or any
contract, agreement or instrument to it is a party or by which it or any of
its property is bound or result in the creation or imposition of any mortgage,
lien or other encumbrance other than to Laurus on any of its property or
assets pursuant to the provisions of any of the foregoing, which, in any of
the foregoing cases, could reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect.
(e) Consents or Approvals. No consent of any other person or
entity (including, without limitation, any creditor of the undersigned) and no
consent, license, permit, approval or authorization of, exemption by, notice
or report to, or registration, filing or declaration with, any governmental
authority is required in connection with the execution, delivery, performance,
validity or enforceability of this Guaranty by it, except to the extent that
the failure to obtain any of the foregoing could not reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect.
(f) Litigation. No litigation, arbitration, investigation or
administrative proceeding of or before any court, arbitrator or governmental
authority, bureau or agency is currently pending or, to the best of its
knowledge, threatened (i) with respect to this Guaranty or any of the
transactions contemplated by this Guaranty or (ii) against or affecting it, or
any of its property or assets, which, in each of the foregoing cases, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.
(g) Financial Benefit. It has derived or expects to derive a
financial or other advantage from each and every loan, advance or extension of
credit made under the Documents or other Obligation incurred by the Debtor to
Laurus.
6. Acceleration.
(a) If any breach of any covenant or condition or other event of
default shall occur and be continuing under any agreement made by Debtor or
any of the undersigned to Laurus, or either Debtor or any of the undersigned
should at any time become insolvent, or make a general assignment, or if a
proceeding in or under any Insolvency Law shall be filed or commenced by, or
in respect of, any of the undersigned, or if a notice of any lien, levy, or
assessment is filed of record with respect to any assets of any of the
undersigned by the United States of America or any department, agency, or
instrumentality thereof, or if any taxes or debts owing at any time or times
hereafter to any one of them becomes a lien or encumbrance upon any assets of
the undersigned in Laurus' possession, or otherwise, any and all Obligations
shall for purposes hereof, at Laurus' option, be deemed due and payable
without notice notwithstanding that any such Obligation is not then due and
payable by Debtor.
(b) Each of the undersigned will promptly notify Laurus of any
default by such undersigned in its respective performance or observance of any
term or condition of any agreement to which the undersigned is a party if the
effect of such default is to cause, or permit the holder of any obligation
under such agreement to cause, such obligation to become due prior to its
stated maturity and, if such an event occurs, Xxxxxx shall have the right to
accelerate such undersigned's obligations hereunder.
7. Payments from Guarantors. Laurus, in its sole and absolute
discretion, with or without notice to the undersigned, may apply on account of
the Obligations any payment from the undersigned or any other guarantors, or
amounts realized from any security for the Obligations, or may deposit any and
all such amounts realized in a non-interest bearing cash collateral deposit
account to be maintained as security for the Obligations.
8. Costs. The undersigned shall pay on demand, all costs, fees and
expenses (including expenses for legal services of every kind) relating or
incidental to the enforcement or protection of the rights of Laurus hereunder
or under any of the Obligations.
9. No Termination. This is a continuing irrevocable guaranty and shall
remain in full force and effect and be binding upon the undersigned, and each
of the undersigned's successors and assigns, until all of the Obligations have
been paid in full and Laurus' obligation to extend credit pursuant to the
Documents has been irrevocably terminated. If any of the present or future
Obligations are guarantied by persons, partnerships or corporations in
addition to the undersigned, the death, release or discharge in whole or in
part or the bankruptcy, merger, consolidation, incorporation, liquidation or
dissolution of one or more of them shall not discharge or affect the
liabilities of any undersigned under this Guaranty.
10. Recapture. Anything in this Guaranty to the contrary
notwithstanding, if Xxxxxx receives any payment or payments on account of the
liabilities guaranteed hereby, which payment or payments or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside and/or required to be repaid to a trustee, receiver, or any other party
under any Insolvency Law, common law or equitable doctrine, then to the extent
of any sum not finally retained by Xxxxxx, the undersigned's obligations to
Xxxxxx shall be reinstated and this Guaranty shall remain in full force and
effect (or be reinstated) until payment shall have been made to Laurus, which
payment shall be due on demand.
11. Books and Records. The books and records of Xxxxxx showing the
account between Xxxxxx and Debtor shall be admissible in evidence in any
action or proceeding, shall be binding upon the undersigned for the purpose of
establishing the items therein set forth and shall constitute prima facie
proof thereof.
12. No Waiver. No failure on the part of Laurus to exercise, and no
delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by Xxxxxx of any
right, remedy or power hereunder preclude any other or future exercise of any
other legal right, remedy or power. Each and every right, remedy and power
hereby granted to Laurus or allowed it by law or other agreement shall be
cumulative and not exclusive of any other, and may be exercised by Xxxxxx at
any time and from time to time.
13. Waiver of Jury Trial. EACH OF THE UNDERSIGNED DOES HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BASED ON OR WITH RESPECT TO THIS GUARANTY OR ANY OF
THE TRANSACTIONS CONTEMPLATED HEREBY OR RELATING OR INCIDENTAL HERETO. THE
UNDERSIGNED DOES HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF XXXXXX HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LAURUS WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
14. Governing Law; Jurisdiction; Amendments. THIS INSTRUMENT CANNOT BE
CHANGED OR TERMINATED ORALLY, AND SHALL BE GOVERNED, CONSTRUED AND INTERPRETED
AS TO VALIDITY, ENFORCEMENT AND IN ALL OTHER RESPECTS IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT HAVING EFFECT TO PRINCIPLES OF CONFLICTS
OF LAWS. EACH OF THE UNDERSIGNED EXPRESSLY CONSENTS TO THE JURISDICTION AND
VENUE OF THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK, AND
OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR
ALL PURPOSES IN CONNECTION HEREWITH. ANY JUDICIAL PROCEEDING BY THE
UNDERSIGNED AGAINST LAURUS INVOLVING, DIRECTLY OR INDIRECTLY ANY MATTER OR
CLAIM IN ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED HEREWITH SHALL BE
BROUGHT ONLY IN THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK
OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK.
THE UNDERSIGNED FURTHER CONSENTS THAT ANY SUMMONS, SUBPOENA OR OTHER PROCESS
OR PAPERS (INCLUDING, WITHOUT LIMITATION, ANY NOTICE OR MOTION OR OTHER
APPLICATION TO EITHER OF THE AFOREMENTIONED COURTS OR A JUDGE THEREOF) OR ANY
NOTICE IN CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY BE SERVED INSIDE OR
OUTSIDE OF THE STATE OF NEW YORK OR THE SOUTHERN DISTRICT OF NEW YORK BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE
PROVIDED A REASONABLE TIME FOR APPEARANCE IS PERMITTED, OR IN SUCH OTHER
MANNER AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS. EACH OF THE
UNDERSIGNED WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION
INSTITUTED HEREON AND SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE OR BASED UPON FORUM NON CONVENIENS.
15. Severability. To the extent permitted by applicable law, any
provision of this Guaranty which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
16. Amendments, Waivers. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by the undersigned therefrom shall
in any event be effective unless the same shall be in writing executed by each
of the undersigned directly affected by such amendment and/or waiver and
Xxxxxx.
17. Notice. All notices, requests and demands to or upon the
undersigned, shall be in writing and shall be deemed to have been duly given
or made (a) when delivered, if by hand, (b) three (3) days after being sent,
postage prepaid, if by registered or certified mail, (c) when confirmed
electronically, if by facsimile, or (d) when delivered, if by a recognized
overnight delivery service in each event, to the numbers and/or address set
forth beneath the signature of the undersigned.
18. Successors. Laurus may, from time to time, without notice to the
undersigned, sell, assign, transfer or otherwise dispose of all or any part of
the Obligations and/or rights under this Guaranty. Without limiting the
generality of the foregoing, Laurus may assign, or grant participations to,
one or more banks, financial institutions or other entities all or any part of
any of the Obligations. In each such event, Laurus, its Affiliates and each
and every immediate and successive purchaser, assignee, transferee or holder
of all or any part of the Obligations shall have the right to enforce this
Guaranty, by legal action or otherwise, for its own benefit as fully as if
such purchaser, assignee, transferee or holder were herein by name
specifically given such right. Laurus shall have an unimpaired right to
enforce this Guaranty for its benefit with respect to that portion of the
Obligations which Xxxxxx has not disposed of, sold, assigned, or otherwise
transferred.
19. Release. Nothing except cash payment in full of the Obligations
shall release any of the undersigned from liability under this Guaranty.
[REMAINDER OF THIS PAGE IS BLANK.
SIGNATURE PAGE IMMEDIATELY FOLLOWS]
IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned
this 25th day of June, 2004.
DATALOGIC CONSULTING, INC.
/s/ Xxxxx Xxxxxx
By:___________________________________
Name: Xxxxx Xxxxxx
Title: CFO
Address: 00000 Xxx Xxxxxx Xxx. Suite 250
Irvine, CA 92612
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
State of Incorporation: TX
IPN COMMUNICATIONS, INC.
/s/ Xxxxx Xxxxxx
By:__________________________
Name: Xxxxx Xxxxxx
Title: President
Address: same as above
Telephone:
Facsimile:
State of Incorporation: CA
