GUARANTY
EXECUTION
VERSION
This
Guaranty (the “Guaranty”) is made this
26th
day of May, 2010, by such guarantors listed on the signature pages hereof
(collectively, jointly and severally, “Guarantors,” and each,
individually, a “Guarantor”), in favor of Xxxx
Capital Partners, LP and EREF PARA, LLC (together with its successors, assigns,
endorsees and transferees, “Purchaser”).
RECITALS
WHEREAS, pursuant to that
certain Securities Purchase Agreement dated as of May 26, 2010 (as may be
amended, restated, supplemented, or otherwise modified from time to time,
including all schedules thereto, the “Securities Purchase Agreement”) by and
among Paradigm Holdings, Inc., a Wyoming corporation (“Parent”), Purchaser and each
of the other investors listed on the Schedule of Purchasers attached thereto
(together with Purchaser, “Purchasers”), Parent has
agreed to sell, and Purchasers have each agreed to purchase, severally and not
jointly, certain Notes; and
WHEREAS, each Guarantor is a
direct or indirect wholly-owned Subsidiary of Parent and will receive direct and
substantial benefits from the purchase by Purchasers of the Notes;
and
WHEREAS, in order to induce
Purchasers to purchase, severally and not jointly, the Notes as provided for in
the Securities Purchase Agreement, Guarantors have agreed to jointly and
severally guaranty all of Parent’s obligations under and with respect to the
Notes and the Securities Purchase Agreement; and
WHEREAS, in connection
herewith, Guarantors, Parent and Purchasers have entered into that certain
Security Agreement dated of even date herewith (as amended, restated,
supplemented, or otherwise modified from time to time, including all schedules
thereto, the “Security
Agreement”), pursuant to which Guarantors and Parent (Guarantors and
Parent, collectively, “Obligors” and each,
individually, an “Obligor”) have granted each of
the Purchasers continuing security interests in all assets of each Obligor, as
more fully set forth in the Security Agreement.
AGREEMENTS
NOW, THEREFORE, for and in
consideration of the recitals made above and other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, each Guarantor hereby agrees as follows:
1. Definitions. All
capitalized terms used herein that are not otherwise defined herein shall have
the meanings given them in the Security Agreement.
2. Guaranteed
Obligations.
Guarantors jointly and severally hereby irrevocably and unconditionally guaranty
to Purchaser the due and punctual Satisfaction in Full of the Guaranteed
Obligations (as defined below). “Guaranteed Obligations” means,
collectively, all of the present and future payment and performance obligations
of each Obligor arising under the Securities Purchase Agreement, any and all
Notes payable to Purchaser, the Security Agreement and the other Transaction
Documents, including, without limitation, reasonable attorneys’ fees and
expenses and any interest, fees, or expenses that accrue after the filing of an
Insolvency Proceeding, regardless of whether allowed or allowable in whole or in
part as a claim in any Insolvency Proceeding.
3. Guarantors’ Representations
and Warranties. Each
Guarantor represents and warrants to Purchaser that such Guarantor expects to
derive substantial benefits from the purchase by Purchasers of the Notes and the
other transactions contemplated hereby and by the other Transaction Documents.
Purchaser may rely conclusively on a continuing warranty, hereby made, that such
Guarantor continues to be benefited by this Guaranty and Purchaser shall have no
duty to inquire into or confirm the receipt of any such benefits, and this
Guaranty shall be effective and enforceable by Purchaser without regard to the
receipt, nature or value of any such benefits.
4. Unconditional
Nature. No act
or thing need occur to establish any Guarantor’s liability hereunder, and no act
or thing, except Satisfaction in Full of the Guaranteed Obligations (as defined
below), shall in any way exonerate any Guarantor hereunder or modify, reduce,
limit or release any Guarantor’s liability hereunder. This is an absolute,
unconditional and continuing guaranty of payment of the Guaranteed Obligations
and shall continue to be in force and be binding upon each Guarantor until
Satisfaction in Full of the Guaranteed Obligations. Each Guarantor agrees that
this Guaranty is a guaranty of Satisfaction in Full of the Guaranteed
Obligations and not of collection, and that its obligations under this Guaranty
shall be primary, absolute and unconditional. In addition to the terms set
forth herein, it is expressly understood and agreed that, if, at maturity and at
any time during the continuance of an Event of Default, the outstanding amount
of the Guaranteed Obligations under the Transaction Documents (including,
without limitation, all accrued interest thereon, all accrued late charges
thereon and all premiums due in respect thereof) is declared to be immediately
due and payable, then Guarantors shall, upon notice of such acceleration,
without further demand, pay to Purchaser the entire outstanding Guaranteed
Obligations due and owing to Purchaser.
5. Subrogation. No
Guarantor will exercise or enforce any right of contribution, reimbursement,
recourse or subrogation available to such Guarantor as to any of the Guaranteed
Obligations, or against any Person liable therefor, or as to any collateral
security therefor, unless and until Satisfaction in Full of the Guaranteed
Obligations.
6. Enforcement
Expenses. Each
Guarantor shall pay or reimburse Purchaser for all reasonable costs, expenses
and attorneys’ fees paid or incurred by Purchaser in endeavoring to collect and
enforce the Guaranteed Obligations and in enforcing this Guaranty.
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7. Obligations
Absolute. Each
Guarantor agrees that its obligations hereunder are irrevocable, absolute,
independent and unconditional and shall not be affected by any circumstance
which constitutes a legal or equitable discharge of a guarantor or surety other
than Satisfaction in Full of the Guaranteed Obligations. In furtherance of the
foregoing and without limiting the generality thereof, each Guarantor agrees
that none of its obligations hereunder shall be affected or impaired by any of
the following acts or things (which Purchaser is expressly authorized to do,
omit or suffer from time to time, without consent or approval by or notice to
any Guarantor): (a) any acceptance of collateral security, guarantors,
accommodation parties or sureties for any or all of the Guaranteed Obligations;
(b) one or more extensions or renewals of the Guaranteed Obligations
(whether or not for longer than the original period) or any modification of the
interest rates, maturities, if any, or other contractual terms applicable to any
of the Guaranteed Obligations or any amendment or modification of any of the
terms or provisions of any of the Transaction Documents; (c) any waiver or
indulgence granted to Parent or any other Obligor, any delay or lack of
diligence in the enforcement of the Guaranteed Obligations, or any failure to
institute proceedings, file a claim, give any required notices or otherwise
protect any of the Guaranteed Obligations; (d) any full or partial release
of, compromise or settlement with, or agreement not to xxx, Parent, any other
Obligor or any other Person liable in respect of any of the Guaranteed
Obligations; (e) any release, surrender, cancellation or other discharge of
any evidence of the Guaranteed Obligations or the acceptance of any instrument
in renewal or substitution therefor; (f) any failure to obtain collateral
security (including rights of setoff) for the Guaranteed Obligations, or to see
to the proper or sufficient creation and perfection thereof, or to establish the
priority thereof, or to preserve, protect, insure, care for, exercise or enforce
any collateral security; or any modification, alteration, substitution,
exchange, surrender, cancellation, termination, release or other change,
impairment, limitation, loss or discharge of any collateral security;
(g) any collection, sale, lease or disposition of, or any other foreclosure
or enforcement of or realization on, any collateral security; (h) any
assignment, pledge or other transfer of any of the Guaranteed Obligations or any
evidence thereof; (i) any manner, order or method of application of any
payments or credits upon the Guaranteed Obligations or (j) Purchaser not being a
Permitted Secured Party. Each Guarantor waives any and all defenses and
discharges available to a surety, guarantor or accommodation
co-obligor.
8. Waivers by
Guarantors. Each
Guarantor waives any and all defenses, claims, setoffs and discharges of, and/or
against, Parent, or any other Obligor or Person (including, without limitation,
Purchaser), pertaining to the Guaranteed Obligations, except the defense of
discharge by indefeasible satisfaction and discharge in full. Without
limiting the generality of the foregoing, no Guarantor will assert, plead or
enforce against any Purchaser any defense of waiver, release, discharge or
disallowance in any Insolvency Proceeding, statute of limitations, res judicata,
statute of frauds, anti-deficiency statute, fraud, incapacity, minority, usury,
illegality or unenforceability which may be available to Parent or any other
Obligor or Person liable in respect of any of the Guaranteed Obligations, or any
setoff available to any Purchaser against Parent or any other such Obligor or
Person, whether or not on account of a related transaction. Each
Guarantor expressly agrees that such Guarantor shall be and remain liable for
any deficiency remaining after foreclosure of any mortgage or security interest
securing the Guaranteed Obligations, whether or not the liability of Parent or
any other Obligor or Person for such deficiency is discharged pursuant to
statute or judicial decision. The liability of each Guarantor shall
not be affected or impaired by, and each Guarantor waives and agrees it shall
not at any time insist upon, plead or in any manner clam or take the benefit of,
any voluntary or involuntary liquidation, dissolution, sale or other disposition
of all or substantially all of the assets, marshalling of assets and
liabilities, any valuation, appraisal, stay, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of, or other similar event or
proceeding affecting, Parent or any of its assets. No Guarantor will
assert, plead or enforce against any Purchaser any claim, defense or setoff
available to such Guarantor against Parent. Each Guarantor waives
presentment, demand for payment, notice of dishonor or nonpayment and protest of
any instrument evidencing the Guaranteed Obligations. Purchaser shall not be
required first to resort for payment of the Guaranteed Obligations to Parent or
any other Person, or their properties, or first to enforce, realize upon or
exhaust any collateral security for the Guaranteed Obligations, before enforcing
this Guaranty.
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9. If Payments Set Aside,
etc. If
any payment applied by Purchaser to the Guaranteed Obligations is thereafter set
aside, recovered, rescinded or required to be returned for any reason
(including, without limitation, the bankruptcy, insolvency or reorganization of
Parent or any other Obligor or Person), the Guaranteed Obligations to which such
payment was applied shall for the purpose of this Guaranty be deemed to have
continued in existence, notwithstanding such application, and this Guaranty
shall be enforceable as to such Guaranteed Obligations as fully as if such
application had never been made.
10. Additional Obligation of
Guarantors. Each
Guarantor’s liability under this Guaranty is in addition to and shall be
cumulative with all other liabilities of such Guarantor to Purchaser as
guarantor, surety, endorser, accommodation co-obligor or otherwise of any of the
Guaranteed Obligations, without any limitation as to amount.
11. No Duties Owed by
Purchaser. Each
Guarantor acknowledges and agrees that Purchaser (a) has not made any
representations or warranties with respect to, (b) does not assume any
responsibility to such Guarantor for, and (c) has no duty to provide
information to such Guarantor regarding, the enforceability of any of the
Guaranteed Obligations or the financial condition of Parent or any other Obligor
or Person. Each Guarantor has independently determined the creditworthiness of
Parent and the enforceability of the Guaranteed Obligations and until
Satisfaction in Full of the Guaranteed Obligations will independently and
without reliance on Purchaser continue to make such determinations.
12. Miscellaneous
(a) This
Guaranty may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party. In
the event that any signature is delivered by facsimile transmission or by an
e-mail which contains a portable document format (.pdf) file of an executed
signature page, such signature page shall create a valid and binding obligation
of the party executing (or on whose behalf such signature is executed) with the
same force and effect as if such signature page were an original thereof. Any
party delivering an executed counterpart of this Guaranty by facsimile or other
electronic method of transmission also shall deliver an original executed
counterpart of this Guaranty but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Guaranty.
(b) Any
provision of this Guaranty which is prohibited or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in that jurisdiction or affecting
the validity or enforceability of such provision in any other
jurisdiction.
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(c) Headings
used in this Guaranty are for convenience only and shall not be used in
connection with the interpretation of any provision hereof.
(d) The
pronouns used herein shall include, when appropriate, either gender and both
singular and plural, and the grammatical construction of sentences shall conform
thereto.
(e) Unless
the context of this Guaranty or any other Transaction Document clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, the terms “includes” and “including” are
not limiting, and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.” The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Guaranty or
any other Transaction Document refer to this Guaranty or such other Transaction
Document, as the case may be, as a whole and not to any particular provision of
this Guaranty or such other Transaction Document, as the case may
be. Section, subsection, clause, schedule, and exhibit references
herein are to this Guaranty unless otherwise specified. Any reference
in this Guaranty or in any other Transaction Document to any agreement,
instrument, or document shall include all alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein). “Satisfaction in Full of the
Guaranteed Obligations” shall mean the indefeasible payment in full in
cash and discharge, or other satisfaction in accordance with the terms of the
Transaction Documents and discharge, of all Guaranteed Obligations in full.
“Satisfaction in Full of the
Secured Obligations” shall mean the indefeasible payment in full in cash
and discharge, or other satisfaction in accordance with the terms of the
Transaction Documents and discharge, of all Secured Obligations in full. Any
reference herein to any Person shall be construed to include such Person’s
permitted successors and permitted assigns.
(f) This
Guaranty shall be effective upon delivery to Purchaser, without further act,
condition or acceptance by Purchaser, shall be binding upon each Guarantor and
the successors and assigns of each Guarantor, and shall inure to the benefit of
Purchaser and its participants, successors and assigns. This Guaranty may not be
waived, modified, amended, terminated, released or otherwise changed except by a
writing signed by each Guarantor and Purchaser.
(g) The
language used in this Guaranty will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict construction will
be applied against any party. For clarification purposes, the Recitals are part
of this Guaranty.
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(h) All
dollar amounts referred to in this Guaranty and the other Transaction Documents
(as defined in the Securities Purchase Agreement) are in United States Dollars
(“U.S. Dollars”), and
all amounts owing under this Guaranty and all other Transaction Documents shall
be paid in U.S. Dollars. All amounts denominated in other currencies shall be
converted in the U.S. Dollar equivalent amount in accordance with the Exchange
Rate on the date of calculation. “Exchange Rate” means, in relation to
any amount of currency to be converted into U.S. Dollars pursuant to this
Guaranty, the U.S. Dollar exchange rate as published in the Wall Street Journal
on the relevant date of calculation.
(i) Judgment
Currency.
(i) If
for the purpose of obtaining or enforcing judgment against any Guarantor in any
court in any jurisdiction it becomes necessary to convert into any other
currency (such other currency being hereinafter in this Section 12(i) referred
to as the “Judgment
Currency”) an amount due in U.S. Dollars under this Guaranty or any other
Transaction Document, the conversion shall be made at the Exchange Rate
prevailing on the Trading Day (as defined in the Securities Purchase Agreement)
immediately preceding: (1) the date actual payment of the amount due, in the
case of any proceeding in the courts of New York or in the courts of any other
jurisdiction that will give effect to such conversion being made on such date or
(2) the date on which the foreign court determines, in the case of any
proceeding in the courts of any other jurisdiction (the date as of which such
conversion is made pursuant to this Section 12(i)(i) being hereinafter referred
to as the “Judgment Conversion
Date”).
(ii) If
in the case of any proceeding in the court of any jurisdiction referred to in
Section 12(i)(i) above, there is a change in the Exchange Rate prevailing
between the Judgment Conversion Date and the date of actual payment of the
amount due, the applicable party shall pay such adjusted amount as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the Exchange Rate prevailing on the date of payment, will produce
the amount of U.S. Dollars which could have been purchased with the amount of
Judgment Currency stipulated in the judgment or judicial order at the Exchange
Rate prevailing on the Judgment Conversion Date.
(iii) Any
amount due from any Guarantor under this provision shall be due as a separate
debt and shall not be affected by judgment being obtained for any other amounts
due under or in respect of this Guaranty or any other Transaction
Document.
13. Notices. All
notices and other communications provided for hereunder shall be given in the
form and manner, and delivered to such addresses, as specified in the Security
Agreement.
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14. Governing Law; Jurisdiction;
Service of Process; Jury Trial. All
questions concerning the construction, validity, enforcement and interpretation
of this Guaranty shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of
New York. Each Guarantor hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper; provided, however, any suit seeking enforcement of this Guaranty may
be brought, at Purchaser’s option, in the courts of any jurisdiction where
Purchaser elects to bring such action. Each Guarantor hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Guaranty and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Without limitation of the foregoing, each Guarantor hereby irrevocably appoints
Parent as such Guarantor’s agent for purposes of receiving and accepting any
service of process hereunder. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. EACH GUARANTOR HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
[signature page
follows]
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IN
WITNESS WHEREOF, this Guaranty has been duly executed by each Guarantor as of
the date set forth above.
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By:
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/s/Xxxxx X. XxXxxxxxxx
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Name:
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Xxxxx X. XxXxxxxxxx
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Title:
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President and Chief Executive
Officer
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PARADIGM
SOLUTIONS CORPORATION
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By:
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/s/Xxxxx X. XxXxxxxxxx
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Name:
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Xxxxx X. XxXxxxxxxx
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Title:
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President and Chief Executive
Officer
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XXXXXXXX
TECHNOLOGY SOLUTIONS LLC
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By:
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/s/Xxxxx X. XxXxxxxxxx
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Name:
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Xxxxx X. XxXxxxxxxx
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Title:
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Manager
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TRINITY
INFORMATION MANAGEMENT SERVICES
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By:
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/s/Xxxxx X. XxXxxxxxxx
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Name:
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Xxxxx X. XxXxxxxxxx
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Title:
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President and Chief Executive
Officer
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