Exhibit 10.6
EXHIBIT F
SUBSIDIARY
GUARANTEE
SUBSIDIARY
GUARANTEE, dated as of August
, 2007 (this
“ Guarantee ”), made by each of the signatories
hereto (together with any other entity that may become a party
hereto as provided herein, the “ Guarantors ”),
in favor of the purchasers signatory (the “ Purchasers
”) the Purchase Agreements (as defined below).
WITNESSETH:
WHEREAS, pursuant
to that certain Securities Purchase Agreement, dated September 15,
2005, that certain Securities Purchase Agreement, dated August 30,
2006 and that certain Securities Purchase Agreement dated as of the
date hereof, by and between the Company and the Purchasers
(collectively, the “ Purchase Agreements ”), the
Company has agreed to sell and issue to the Purchasers, and the
Purchasers have agreed to purchase from the Company the
Company’s Amortizing Convertible Debentures issued on
September 15, 2005, Amortizing Convertible Debentures issued on
August 30, 2006 and Amortizing Senior Secured Convertible
Debentures issued on August , 2007 (collectively,
the “ Debentures ”), subject to the terms and
conditions set forth therein; and
WHEREAS, each
Guarantor will directly benefit from the extension of credit to the
Company represented by the issuance of the Debentures;
and
NOW, THEREFORE, in
consideration of the premises and to induce the Purchasers to enter
into the applicable Purchase Agreement and to carry out the
transactions contemplated thereby, each Guarantor hereby agrees
with the Purchasers as follows:
1.
Definitions . Unless otherwise defined herein, terms defined
in the Purchase Agreement most recently entered into with the
applicable Purchaser and used herein shall have the meanings given
to them in such Purchase Agreement. The words “hereof,”
“herein,” “hereto” and
“hereunder” and words of similar import when used in
this Guarantee shall refer to this Guarantee as a whole and not to
any particular provision of this Guarantee, and Section and
Schedule references are to this Guarantee unless otherwise
specified. The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms. The following terms shall have the following
meanings:
“ Guarantee ” means this
Subsidiary Guarantee, as the same may be amended, supplemented or
otherwise modified from time to time.
“ Obligations ”
means, in addition to all other costs and expenses of collection
incurred by Purchasers in enforcing any of such Obligations and/or
this Guarantee, all of the liabilities and obligations (primary,
secondary, direct, contingent, sole, joint or several) due or to
become due, or that are now or may be
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hereafter contracted or acquired, or owing to,
of any Debtor to the Secured Parties, including, without
limitation, all obligations under this Agreement, the Debentures,
this Guarantee and any other instruments, agreements or other
documents executed and/or delivered in connection herewith or
therewith, in each case, whether now or hereafter existing,
voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed
with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or
any portion of such obligations or liabilities that are paid, to
the extent all or any part of such payment is avoided or recovered
directly or indirectly from any of the Secured Parties as a
preference, fraudulent transfer or otherwise as such obligations
may be amended, supplemented, converted, extended or modified from
time to time. Without limiting the generality of the
foregoing, the term “Obligations” shall include,
without limitation: (i) principal of, and interest on the
Debentures and the loans extended pursuant thereto; (ii) any and
all other fees, indemnities, costs, obligations and liabilities of
the Debtors from time to time under or in connection with this
Agreement, the Debentures, the Guarantee and any other instruments,
agreements or other documents executed and/or delivered in
connection herewith or therewith; and (iii) all amounts (including
but not limited to post-petition interest) in respect of the
foregoing that would be payable but for the fact that the
obligations to pay such amounts are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar
proceeding involving any Debtor.
2.
Guarantee
.
(a)
Guarantee .
(i)
The Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantee to the Purchasers and
their respective successors, indorsees, transferees and assigns,
the prompt and complete payment and performance by the Company when
due (whether at the stated maturity, by acceleration or otherwise)
of the Obligations.
(ii)
Anything herein or in any other Transaction Document
to the contrary notwithstanding, the maximum liability of each
Guarantor hereunder and under the other Transaction Documents shall
in no event exceed the amount which can be guaranteed by such
Guarantor under applicable federal and state laws, including laws
relating to the insolvency of debtors, fraudulent conveyance or
transfer or laws affecting the rights of creditors generally (after
giving effect to the right of contribution established in Section
2(b)).
(iii)
Each Guarantor agrees that the Obligations may at any
time and from time to time exceed the amount of the liability of
such Guarantor
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hereunder without
impairing the guarantee contained in this Section 2 or affecting
the rights and remedies of the Purchasers hereunder.
(iv)
The guarantee contained in this Section 2 shall
remain in full force and effect until all the Obligations and the
obligations of each Guarantor under the guarantee contained in this
Section 2 shall have been satisfied by payment in full.
(v)
No payment made by the Company, any of the
Guarantors, any other guarantor or any other Person or received or
collected by the Purchasers from the Company, any of the
Guarantors, any other guarantor or any other Person by virtue of
any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in
payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than
any payment made by such Guarantor in respect of the Obligations or
any payment received or collected from such Guarantor in respect of
the Obligations), remain liable for the Obligations up to the
maximum liability of such Guarantor hereunder until the Obligations
are paid in full.
(vi)
Notwithstanding anything to the contrary in this
Agreement, with respect to any defaulted non-monetary Obligations
the specific performance of which by the Guarantors is not
reasonably possible (e.g. the issuance of the Company’s
Common Stock), the Guarantors shall only be liable for making the
Purchasers whole on a monetary basis for the Company’s
failure to perform such Obligations in accordance with the
Transaction Documents.
(b)
Right of Contribution . Each Guarantor hereby
agrees that to the extent that a Guarantor shall have paid more
than its proportionate share of any payment made hereunder, such
Guarantor shall be entitled to seek and receive contribution from
and against any other Guarantor hereunder which has not paid its
proportionate share of such payment. Each Guarantor’s right
of contribution shall be subject to the terms and conditions of
Section 2(c). The provisions of this Section 2(b) shall in no
respect limit the obligations and liabilities of any Guarantor to
the Purchasers, and each Guarantor shall remain liable to the
Purchasers for the full amount guaranteed by such Guarantor
hereunder.
(c)
No Subrogation . Notwithstanding any
payment made by any Guarantor hereunder or any set-off or
application of funds of any Guarantor by the Purchasers, no
Guarantor shall be entitled to be subrogated to any of the rights
of the Purchasers against the Company or any other Guarantor or any
collateral security or guarantee or right of offset held by the
Purchasers for the payment of the Obligations, nor shall any
Guarantor seek or be entitled to seek any contribution or
reimbursement from the Company or any other Guarantor in
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respect of payments
made by such Guarantor hereunder, until all amounts owing to the
Purchasers by the Company on account of the Obligations are paid in
full. If any amount shall be paid to any Guarantor on account of
such subrogation rights at any time when all of the Obligations
shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Purchasers, segregated from other funds
of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Purchasers in the exact form
received by such Guarantor (duly indorsed by such Guarantor to the
Purchasers, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as the Purchasers may
determine.
(d)
Amendments, Etc. With Respect to the
Obligations . Each Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against any
Guarantor and without notice to or further assent by any Guarantor,
any demand for payment of any of the Obligations made by the
Purchasers may be rescinded by the Purchasers and any of the
Obligations continued, and the Obligations, or the liability of any
other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Purchasers, and the Purchase
Agreements and the other Transaction Documents and any other
documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part,
as the Purchasers may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held
by the Purchasers for the payment of the Obligations may be sold,
exchanged, waived, surrendered or released. The Purchasers shall
have no obligation to protect, secure, perfect or insure any Lien
at any time held by them as security for the Obligations or for the
guarantee contained in this Section 2 or any property subject
thereto.
(e)
Guarantee Absolute and Unconditional . Each
Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Obligations and notice of or
proof of reliance by the Purchasers upon the guarantee contained in
this Section 2 or acceptance of the guarantee contained in this
Section 2; the Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Company
and any of the Guarantors, on the one hand, and the Purchasers, on
the other hand, likewise shall be conclusively presumed to have
been had or consummated in reliance upon the guarantee contained in
this Section 2. Each Guarantor waives to the extent permitted by
law diligence, presentment, protest, demand for payment and notice
of default or nonpayment to or upon the Company or any of the
Guarantors with respect to the Obligations. Each Guarantor
understands and agrees that the guarantee contained in this Section
2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or
enforceability of the Purchase
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Agreements or any other
Transaction Document, any of the Obligations or any other
collateral security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by the
Purchasers, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance or fraud or misconduct by
Purchasers) which may at any time be available to or be asserted by
the Company or any other Person against the Purchasers, or (c) any
other circumstance whatsoever (with or without notice to or
knowledge of the Company or such Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge
of the Company for the Obligations, or of such Guarantor under the
guarantee contained in this Section 2, in bankruptcy or in any
other instance. When making any demand hereunder or otherwise
pursuing its rights and remedies hereunder against any Guarantor,
the Purchasers may, but shall be under no obligation to, make a
similar demand on or otherwise pursue such rights and remedies as
they may have against the Company, any other Guarantor or any other
Person or against any collateral security or guarantee for the
Obligations or any right of offset with respect thereto, and any
failure by the Purchasers to make any such demand, to pursue such
other rights or remedies or to collect any payments from the
Company, any other Guarantor or any other Person or to realize upon
any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Company, any other Guarantor
or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve any Guarantor of any obligation
or liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of
law, of the Purchasers against any Guarantor. For the purposes
hereof, “demand” shall include the commencement and
continuance of any legal proceedings.
(f)
Reinstatement . The guarantee contained in
this Section 2 shall continue to be effective, or be reinstated, as
the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored
or returned by the Purchasers upon the insolvency, bankruptc
