Exhibit 10.3
GUARANTY
In consideration of SEATTLE CITY
EMPLOYEES’ RETIREMENT SYSTEM, a single-employer
defined-benefit public employee retirements system
(“Lender”) lending SIX MILLION DOLLARS ($6,000,000)
(the “Loan”) to PLATINUM INTELLECTUAL PROPERTY, L.P., a
Texas limited partnership (“Borrower”), the
undersigned, PLATINUM RESEARCH ORGANIZATION, INC., a Delaware
corporation (“Guarantor”), jointly and severally with
all other parties executing similar guaranties, if any, hereby
unconditionally and irrevocably guarantees to Lender prompt payment
of the Loan when due, whether by acceleration or otherwise,
together with all interest thereon, any other sums that become due
and owing to Lender under the Note (as hereinafter defined) or any
of the Security Documents (also as hereinafter defined), including,
without limitation, late charges, premiums for prepayment,
expenditures by Lender to preserve and protect the collateral for
repayment of the Note, amounts that would become due but for the
effect of any bankruptcy proceedings or other insolvency
proceedings and all attorneys’ fees, costs, and expenses of
collection incurred by Lender in enforcing its rights and remedies
under the Note and the Security Documents, and together with
the full and complete discharge and performance of each and every
other term, covenant, obligation, or warranty contained in the Note
or any of the Security Documents.
The Loan is evidenced by a
promissory note (the “Note”) from Borrower dated
December 3, 2004 in the amount of SIX MILLION DOLLARS
($6,000,000), bearing interest and payable as set forth therein,
repayment of which is secured by the documents identified in the
Note as the “Security Documents”. Terms that are
defined in the Note shall have the meaning set forth therein when
used in this Guaranty.
GUARANTOR FURTHER AGREES
THAT:
1. Guarantor indirectly owns 99% of
the equity interests of Borrower and therefore has a direct
financial interest the Loan.
2. The obligations of Guarantor
hereunder are primary, absolute, and unconditional under any and
all circumstances unless and until terminated as provided in
Section 18 below.
3. Without affecting, diminishing,
or otherwise impairing the liability of Guarantor hereunder and
without notice or consent of Guarantor, Lender may from time to
time grant renewals, extensions, indulgences, releases, and
discharges to Borrower or any other guarantor, and may take
security for payment of the Loan, and may release any or all
security for the Loan or refrain from perfecting any interest in
any security granted by Borrower or any other guarantor.
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4. Lender may amend or modify the
Note, the Security Documents, or any other instrument executed to
secure payment thereof or otherwise in connection with the Loan,
and otherwise may deal with Borrower or any other guarantor,
without notice to or consent of Guarantor, and without affecting,
diminishing, or otherwise impairing the liability of Guarantor
hereunder.
5. As security for the full payment
and performance of all of Guarantor’s obligations hereunder,
Guarantor hereby assigns to Lender, all claims and other rights
which Guarantor may now have or hereafter acquire against Borrower
that arises from the existence or performance of Guarantor’s
obligations under this Guaranty, including, without limitation, all
rights of subrogation, reimbursement, contribution, indemnification
and all rights, if any, to participate in any claim or remedy of
Lender against Borrower or any collateral which Lender now has or
may hereafter acquire, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law. Until
Lender has received indefeasible payment in full of the principal
balance of the Note, together with interest thereon and together
with all costs, attorneys’ fees, and other expenses incurred
by Lender in enforcing the payment of the Note, or in enforcing
performance and observation of any other obligation hereby
guaranteed, (i) Guarantor shall have no right to exercise any
such claim, remedy or right against Borrower, and
(ii) Guarantor hereby authorizes and directs Borrower to pay
to Lender, all payments in respect of each such claim, remedy or
right that would otherwise be payable to Guarantor. Any agreement
between Guarantor and Borrower that is contrary to the foregoing
shall be null, void and of no force or effect.
6. Lender may from time to time
consent to any action or nonaction of Borrower or any other
guarantor, which, in the absence of such consent, violates or may
violate any provisions of the Note, the Security Documents, or any
instrument securing repayment thereof or otherwise executed in
connection therewith, and such consent may be granted by Lender
without in any manner affecting, diminishing, or impairing the
liability of Guarantor hereunder.
7. This Guaranty shall continue to
be effective, or be reinstated, as the case may be, if at any time
payment by Borrower or any other guarantor of all or any part of
any sum payable pursuant to the Note or any other guaranty, as the
case may be, is rescinded or otherwise must be returned by Lender
upon the insolvency, bankruptcy, or reorganization of the payor all
as though such payment to Lender had not been made.
8. No change in the name, purposes,
capitalization, or organization of Borrower shall in any way
affect, diminish, or otherwise impair the liability of Guarantor
hereunder, and Lender shall not be obligated to inquire into the
powers of Borrower notwithstanding such borrowing, renewals, or
credits shall be in excess of the powers of Borrower.
9. Lender shall not be obligated to
exhaust its recourse against Borrower, or any other guarantor or
person, or any security it may have
