GUARANTEE
Agreement made as of October 19, 2001 by WaveRider
Communications (Canada) Inc. (the "Guarantor"), 000 Xxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxx, X0X 0X0, a corporation incorporated and subsisting under the
laws of the Province of British Columbia, to and in favour of Xxxxxxx X. Xxxxx,
an individual resident in Salt Spring Island, British Columbia, as agent for the
benefit of the Secured Parties (in such capacity, together with its successors
in such capacity, the "Agent").
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor agrees with the
Agent and the other Secured Parties as follows:
ARTICLE 1
INTERPRETATION
1.01 Definitions
In this agreement:
"Applicable Rate" means 8 % per annum;
"Borrower" means WaveRider Communications Inc.;
"Business Day" means any day, other than a Saturday, Sunday or
statutory holiday observed by Schedule I Canadian chartered banks in Vancouver
and Toronto;
"Guaranteed Obligations" means all present and future debts,
liabilities and obligations of the Borrower to any Secured Party under or in
connection with any Series A Notes or any security therefor;
"Secured Parties" means the Agent and the Persons from time to
time holding any Series A Notes; and
"Series A Notes" means the notes designated as Series A Notes
to be issued by the Borrower in an aggregate principal amount not exceeding
US$1,000,000.
1.02 Terms Generally
The plural of any term defined in this agreement in the
singular shall have a corresponding meaning and vice versa and words importing
gender shall include all genders. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
Unless the context otherwise requires (i) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions in this or any
other agreement in favour of any Secured Parties), (ii) any reference to any
Person shall be construed to include their heirs, legal representatives,
successors and assigns, and (iii) any reference to any Act shall be construed to
refer to such Act as it may be amended and in effect from time to time. The
division of this agreement into articles and sections and the insertion of
headings are for convenience only and shall not affect the interpretation of
this agreement.
ARTICLE 2
GUARANTEE
2.01 Guarantee
The Guarantor hereby irrevocably and unconditionally
guarantees the due and punctual payment and performance to each Secured Party of
all Guaranteed Obligations and agrees to pay on demand all reasonable
out-of-pocket costs and expenses (including, without limitation, legal fees on a
solicitor-client basis) incurred by or on behalf of each Secured Party in
enforcing or endeavouring to collect any Guaranteed Obligations or enforcing any
of its rights hereunder.
2.02 Indemnity
The Guarantor agrees as a primary obligation to indemnify each
Secured Party on demand from and against any loss incurred by the Secured Party
as a result of any of the Guaranteed Obligations being or becoming void,
voidable, unenforceable or ineffective for any reason whatsoever, whether or not
known to the Secured Party, the amount of such loss being the amount which the
Secured Party would otherwise have been entitled to recover from the Borrower.
2.03 Right to Immediate Payment
No Secured Party shall be bound to seek or exhaust its
recourse against the Borrower or other Persons or to realize on any securities
it may hold in respect of the Guaranteed Obligations before being entitled to
payment from the Guarantor under this agreement and the Guarantor hereby
renounces all benefits of discussion and division.
2.04 Account Settled
Any account settled or stated by or between a Secured Party
and the Borrower, or if any such account has not been so stated or settled prior
to any demand for payment hereunder, any account stated by a Secured Party,
shall, in the absence of manifest error, be accepted by the Guarantor as prima
facie evidence that the amount of the Guaranteed Obligations so settled or
stated is due and payable to the Secured Party.
2.05 Demand for Payment
The Guarantor shall make payment of the Guaranteed Obligations
and all other amounts payable by the Guarantor to any Secured Party hereunder
upon demand by the Agent and such demand shall be in writing and given to the
Guarantor, c/o the Borrower, at 000 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx,
X0X 0X0, Attention: Chief Financial Officer, Telephone: (000) 000-0000,
Telecopier: (000) 000-0000. Any such demand shall be deemed to have been validly
and effectively given (i) if personally delivered, (A) on the date of such
delivery, if such date is a Business Day and such delivery was made prior to
3:00 p.m. (Toronto time); or (B) on the Business Day following the date of
delivery in all other cases; or (ii) if transmitted by facsimile or similar
means of recorded communication, (A) on the date of such transmission if such
date is a Business Day and such transmission was received prior to 3:00 p.m.
(Toronto time); or (B) on the Business Day following the date of transmission,
in all other cases. The Guarantor may change its address for notice by giving
written notice of the change to the Agent in accordance with this section. The
liability of the Guarantor hereunder, whether as Guarantor or principal obligor,
shall bear interest from the date of such demand and both before and after
judgment at the Applicable Rate.
2.06 No Set-Off
All amounts payable by the Guarantor hereunder to any Secured
Parties shall be paid to the Agent for the benefit of such Secured Parties,
without set-off or counter-claim and without any deduction or withholding
whatsoever unless and to the extent that the Guarantor shall be prohibited by
law from doing so, in which case the Guarantor shall pay to Agent for the
account of the Secured Party entitled to the payment, such additional amount as
shall be necessary to ensure that such Secured Party, receives the full amount
it would have received if no such deduction or withholding had been made.
2.07 Liability Absolute and Unconditional
(1) The obligations of the Guarantor under this agreement are
continuing, unconditional and absolute and, without limiting the generality of
the foregoing, will not be released, discharged, limited or otherwise affected
by (and the Guarantor hereby consents to or waives, as applicable, to the
fullest extent permitted by applicable law):
(a) any extension, other indulgence, renewal, settlement,
discharge, compromise, waiver, subordination or release in
respect of any Guaranteed Obligations, security, Person or
otherwise;
(b) any modification or amendment of or supplement to the
Guaranteed Obligations, including any increase or decrease in
the principal, the rates of interest or other amounts payable
thereunder;
(c) any release, non-perfection or invalidity of any direct or
indirect security for any Guaranteed Obligations;
(d) any winding-up, dissolution, insolvency, bankruptcy,
reorganization or other similar proceeding affecting the
Borrower or any other Person or any of their property;
(e) the existence of any claim, set-off or other rights which the
Guarantor may have at any time against any Secured Party or
the Borrower or any other Person;
(f) any invalidity, illegality or unenforceability relating to or
against any Borrower or any provision of applicable law or
regulation purporting to prohibit the payment by the Borrower
of any principal or interest in respect of the Guaranteed
Obligations;
(g) any limitation, postponement, prohibition, subordination or
other restriction on the rights of any Secured Party to
payment of the Guaranteed Obligations;
(h) any release, substitution or addition of any co-signer,
endorser or other guarantor of the Guaranteed Obligations;
(i) any defence arising by reason of any failure of any Secured
Party to make any presentment, demand for performance, notice
of non-performance, protest or any other notice, including
notice of acceptance of this agreement, partial payment or
non-payment of any Guaranteed Obligations or the existence,
creation or incurring of new or additional Guaranteed
Obligations;
(j) any defence arising by reason of any failure of any Secured
Party to proceed against the Borrower or any other Person, to
proceed against, apply or exhaust any security held from the
Borrower or any other Person for the Guaranteed Obligations,
to proceed against, apply or exhaust any security held from
the Guarantor or any other Person for the Guaranteed
Obligations or to pursue any other remedy in the power of any
Secured Party whatsoever;
(k) any law which provides that the obligation of a guarantor must
neither be larger in amount nor in other respects more
burdensome than that of the principal obligation or which
reduces a guarantor's obligation in proportion to the
principal obligation;
(l) any defence arising by reason of any incapacity, lack of
authority, or other defence of the Borrower or any other
Person, or by reason of any limitation, postponement,
prohibition on any Secured Party's right to payment of any
Obligations, or by reason of the cessation from any cause
whatsoever of the liability of the Borrower or any other
Person in respect of any Guaranteed Obligations, or by reason
of any act or omission of any Secured Party or others which
directly or indirectly results in the discharge or release of
the Borrower or other Person or all or any part of the
Guaranteed Obligations or any security or guarantee therefor,
whether by contract, operation of law or otherwise;
(m) any defence arising by reason of any failure by any Secured
Party to obtain, perfect or maintain a perfected or prior (or
any) security interest in or lien or encumbrance upon any
property of the Borrower or any other Person, or by reason of
any interest of any Secured Party in any property, whether as
owner thereof or the holder of a security interest therein or
lien or encumbrance thereon, being invalidated, voided,
declared fraudulent or preferential or otherwise set aside, or
by reason of any impairment by any Secured Party of any right
to recourse or collateral;
(n) any defence arising by reason of the failure of any Secured
Party to marshal any property;
(o) any defence based upon any failure of any Secured Party to
give to the Guarantor or the Borrower or other Person notice
of any sale or other disposition of any property securing any
Guaranteed Obligations or any guarantee thereof, or any defect
in any notice that may be given in connection with any sale or
other disposition of any such property, or any failure of any
Secured Party to comply with any applicable law in enforcing
any security interest in or lien upon any such property,
including any failure by any Secured Party to dispose of any
such property in a commercially reasonable manner;
(p) any dealing whatsoever with the Borrower or any other Person
or any security, whether negligently or not, or any failure to
do so;
(q) any defence based upon or arising out of any bankruptcy,
insolvency, reorganization, moratorium, arrangement,
readjustment of debt, liquidation or dissolution proceeding
commenced by or against the Borrower or any other Person,
including any discharge of, or bar against collecting, any
Guaranteed Obligations, in or as a result of any such
proceeding; or
(r) any other act or omission to act or delay of any kind by any
Secured Party, the Borrower or any other Person or any other
circumstance whatsoever, whether similar or dissimilar to the
foregoing, which might, but for the provisions of this
section, constitute a legal or equitable discharge, limitation
or reduction of the obligations of the Guarantor hereunder
(other than the payment in full of all Guaranteed
Obligations).
(2) The provisions of subsection (1) above apply (and the waivers set
out therein will be effective) even if the effect of any action (or failure to
take action) by any Secured Party is to destroy or diminish any subrogation
rights of the Guarantor or any rights of the Guarantor to proceed against the
Borrower for reimbursement or to recover any contribution from any other
guarantor or any other right or remedy of the Guarantor.
2.08 Continuing Nature
This agreement shall continue and apply to any ultimate unpaid
balance of the Guaranteed Obligations and shall be reinstated if at any time
payment of any of the Guaranteed Obligations is rescinded or must otherwise be
returned by any Secured Party upon the insolvency, bankruptcy or reorganization
of the Borrower or for any other reason whatsoever, all as though such payment
had not been made.
2.09 Waiver of Subrogation Rights
In the event that any Secured Party shall receive any payments
on account of the obligations of the Guarantor hereunder whether from the
Guarantor, the realization of any security or otherwise, the Guarantor shall
have no right to claim repayment from or to exercise any rights of subrogation
against the Borrower until all of the obligations of the Borrower to each
Secured Party have been satisfied and paid in full.
2.10 Insolvency and Bulk Sales
In the event of the liquidation, winding up or bankruptcy of
the Borrower (whether voluntary or compulsory) or in the event that the Borrower
shall make a bulk sale of any of its assets within the bulk transfer provisions
of any applicable legislation or any composition with creditors or scheme of
arrangement, each Secured Party shall have the right to rank in priority to the
Guarantor for its claim in respect of the Guaranteed Obligations owing by the
Borrower and to receive all dividends or other payments in respect thereof until
its claim has been paid in full, all without prejudice to its claim against the
Guarantor who shall continue to be liable for any remaining unpaid balance of
the Guaranteed Obligations. In the event of any valuation by any Secured Party
of any securities, such valuation shall not, as between the Secured Party and
the Guarantor, be considered payment, satisfaction or reduction in whole or in
part of any Guaranteed Obligations.
ARTICLE 3
GENERAL
3.01 Additional Security
This agreement is in addition and without prejudice to any
security of any kind (including without limitation guarantees and postponement
agreements whether or not in the same form as this agreement) now or hereafter
held by any Secured Parties.
3.02 Indemnity for Foreign Currency Obligations
In the event that any Secured Party (the "Judgment Creditor")
obtains any judgment in a currency (the "Other Currency") in respect of any
liability of the Guarantor hereunder in any other currency (the "Original
Currency"), the rate of exchange to be used in determining the amount of the
judgment shall be the rate of exchange (the "Exchange Rate") quoted by the The
Toronto-Dominion Bank to its customers as the rate at which its customers could
purchase the Original Currency with the Other Currency on the banking day
preceding the date on which the judgment is rendered. The liability of the
Guarantor hereunder in respect of any amount due in the Original Currency shall,
notwithstanding any judgment in the Other Currency, be discharged only to the
extent that on the banking day following receipt of the payment or satisfaction
of the judgment, the Judgment Creditor would be able to purchase the Original
Currency with the Other Currency based on the Exchange Rate then in effect. If
the amount of the Original Currency which could be purchased by the Judgment
Creditor is less than the amount of the Original Currency originally due to it
hereunder, the Guarantor, agrees, as a separate obligation, to indemnify the
Judgment Creditor against such loss.
3.03 Termination
The obligations of the Guarantor under this agreement shall
terminate upon the payment or satisfaction in full of the Guaranteed
Obligations.
3.04 Amendments and Waivers
No amendment or waiver of any provisions of this agreement nor
consent to any departure by the Guarantor from such provisions shall be
effective unless in writing and signed by the Agent. Any amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose that it is given. No failure on the part of any Secured Parties to
exercise, and no delay in exercising, any right under this agreement or under
any other Documents shall operate as a waiver of such right, nor shall any
single or partial exercise of any such right preclude any other or further
exercise of the right or the exercise of any other right. The remedies of the
Secured Parties under this agreement are cumulative and not exclusive of any
other remedies provided by law.
3.05 Name of Guarantor
The Guarantor hereby confirms that the name, including the
French form thereof, if any, and address of the Guarantor are as set out at the
beginning of this agreement.
3.06 Successors, Assigns and Governing Law
This agreement shall enure to the benefit of and be binding
upon the respective successors and assigns of the Guarantor and the Secured
Parties and shall be governed by and construed in accordance with the laws of
the Province of Ontario (without reference to its conflict of laws rules).
WAVERIDER COMMUNICATIONS (CANADA) INC.
By c/s
---------------------------------------------------------
Authorized Signing Officer
