This GUARANTY
(this “ Guaranty ”) dated as of
December 19, 2005 is entered into by and between Pegasus
Solutions, Inc., a Delaware corporation (the “ Company
”) and Prides Capital Fund I, L.P. (the “
Guarantor ”). Capitalized terms used herein without
definition have the meanings given to them in the Merger Agreement
(as defined below).
WHEREAS,
concurrently with the execution and delivery of this Guaranty, the
Company and Perseus Holding Corp., a Delaware corporation (“
Parent ”), and 406 Acquisition Corp., a Delaware
corporation (“ Merger Sub ” and, together with
Parent, the “ Acquisition Companies ”), are
entering into an Agreement and Plan of Merger, dated as of the date
hereof (the “ Merger Agreement ”), providing for
the Merger of Merger Sub with and into the Company upon the terms
and subject to the conditions set forth therein;
WHEREAS, each of
the Acquisition Companies is an Affiliate of the Guarantor;
and
WHEREAS, in order
to induce the Company to enter into the Merger Agreement, the
Guarantor has agreed to enter into this Guaranty;
NOW, THEREFORE, in
consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Guarantor hereby agree as
follows:
1.
Guaranty . The Guarantor hereby irrevocably and
unconditionally guarantees to the Company the prompt and complete
payment of the payment obligations of each of the Acquisition
Companies arising out of any willful breach by one or both of the
Acquisition Companies under the Merger Agreement that are finally
judicially determined to be due and payable by any of the
Acquisition Companies by reason of a willful breach of the terms of
the Merger Agreement (the “ Guaranteed Obligations
”); provided , however , that the maximum
aggregate liability of the Guarantor hereunder shall not exceed
$5,000,000 (the “ Maximum Amount ”). The Company
hereby agrees that in no event shall the Guarantor be required to
pay to any Person under, in respect of, or in connection with this
Guaranty more than the Maximum Amount, and that the Guarantor shall
not have any obligation or liability to any Person relating to,
arising out of or in connection with this Guaranty other than as
expressly set forth herein. For the purposes of this Guaranty, the
term “finally judicially determined” shall mean the
entry of a judgment by a court or other tribunal of competent
jurisdiction, which judgment has become final and non-appealable,
that the applicable Acquisition Company is in willful breach of the
terms of the Agreement or, in the event such Acquisition Company
becomes the subject of a case under any chapter of title 11 of the
United States Code, the allowance by order of the bankruptcy court
or other court of competent jurisdiction, of the Company’s
proof of claim against such Acquisition Company based on its
willful breach of the Merger Agreement, which order has become
final and non-appealable.
(a) This
Guaranty is one of payment, not performance or collection, and a
separate action or actions may be brought and prosecuted against
the Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against any Acquisition Company or whether any
Acquisition Company is joined in any such action or
actions.
(b) Notwithstanding
any other provision of this Guaranty, the Company hereby agrees
that (i) the Guarantor may assert, as a defense to any payment or
performance by the Guarantor under this Guaranty, any claim,
set-off, deduction or defense that any Acquisition Company could
assert against the Company under the terms of the Merger Agreement
or that could otherwise be asserted by any Acquisition Company
against the Company in any action by the Company against any
Acquisition Company and (ii) any failure by the Company to
comply with the terms of the Merger Agreement, including, without
limitation, any breach by the Company of the representations and
warranties contained therein or in any of the agreements,
certificates and other documents required to be delivered by the
Company pursuant to the terms of the Merger Agreement (whether such
breach results from fraud, intentional misrepresentation or
otherwise), that would relieve any Acquisition Company of its
obligations under the Merger Agreement shall likewise relieve the
Guarantor of their obligations under this Guaranty.
(a) The
Company hereby acknowledges and agrees that none of the Acquisition
Companies has any assets as of the date hereof, and that the
Company shall not have any right to cause any monies to be
contributed to any of the Acquisition Companies by the Guarantor or
any current, former or prospective stockholder, officer, member,
general or limited partner, director, agent, employee, Affiliate or
assignee of the Guarantor.
(b) The
Company hereby agrees that no Person other than the Guarantor shall
have any obligation or liability arising out of, in connection with
or relating to this Guaranty and that neither the Company nor any
other Person shall have any remedy, recourse or right of recovery
against any current, former or prospective stockholder, member,
general or limited partner, officer, director, agent, employee,
Affili
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