EXHIBIT
10.3
GUARANTY
THIS GUARANTY (the
“Guaranty”) is made effective as of the 30
th day of June, 2005 by Patrick Hoene and Christine
Hoene (each a “ Guarantor ”; collectively, the
“ Guarantors ”), to and for the benefit of STEN
Corporation, a Minnesota corporation (the “
Beneficiary ”).
BACKGROUND
A.
Life Safe Services, LLC, a Missouri
limited liability company (the “ Debtor ”), the
Beneficiary and LifeSafe Services, Inc. (“LifeSafe”)
are parties to that certain Asset Purchase Agreement dated of even
date herewith (as it may hereafter be amended or otherwise modified
from time to time, the “ Agreement ”) under
which the Debtor agreed to purchase certain business assets
identified therein (the “Purchased
Assets”).
B.
The Guarantors, as direct or indirect
owners of the Debtor, will benefit substantially from the
transactions described in the Agreement.
C.
The Debtor desires to finance a
portion of the purchase price for the Purchased Assets acquired
under the Agreement pursuant to the terms and conditions of that
certain Subordinated Promissory Note dated of even date herewith
(the “ Note ”).
D.
The Beneficiary, either directly or
indirectly through its wholly-owned subsidiary LifeSafe, is willing
to extend such credit to the Debtor under the Note on the condition
that each of the Guarantors execute and deliver this Guaranty to
the Beneficiary as their absolute, joint and several guaranty.
The Guaranty served as a material inducement for Beneficiary
to enter into the transactions set forth in and contemplated by the
Agreement and Note.
AGREEMENT
NOW, THEREFORE, in consideration of
the foregoing and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each of
the Guarantors agrees as follows:
1.
Each Guarantor hereby absolutely and
unconditionally guarantees to the Beneficiary the prompt payment
and full performance of each and every debt and obligation arising
pursuant to the terms of the Note (all such debts, liabilities, and
obligations are collectively referred to herein as the “
Secured Obligations ”).
2.
No act or thing need occur to
establish the liability of either of the Guarantors under this
Guaranty, and no act or thing, except full payment and discharge of
all Secured Obligations, will in any way exonerate the Guarantor or
modify, reduce, limit or release the liability of either Guarantor
under this Guaranty.
3.
This is an absolute, unconditional and
continuing guaranty of payment of and performance of the Secured
Obligations and will continue to be in force and be binding upon
each of the Guarantors until all Secured Obligations are paid and
satisfied in full.
4.
If the Guarantor is or becomes
insolvent (as defined under Title 11, U.S. Code or any similar
federal or state law for the relief of debtors) then the
Beneficiary will have the right to declare immediately due and
payable, and the Guarantors will forthwith pay to the Beneficiary,
the full amount of all Secured Obligations, whether due and payable
or unmatured. If either of the Guarantors voluntarily
commences or there is commenced involuntarily against either of the
Guarantors or the Debtor a case under the United States Bankruptcy
Code, the full amount of all Secured Obligations, whether due and
payable or unmatured, shall be immediately due and payable without
demand or notice thereof. If there exists and is continuing
an Event of Default (as defined in the Note), the full amount of
all Secured Obligations, whether due and payable or unmatured,
shall be immediately due and payable without demand or notice
thereof.
5.
Each of the Guarantors is liable for
all Secured Obligations, without any limitation as to amount, plus
accrued interest thereon and all attorneys’ fees, collection
costs and enforcement expenses referable thereto.
6.
Until such time as the Secured
Obligations have been indefeasibly paid in full to the Beneficiary,
each of the Guarantors waives and relinquishes any right of
subrogation or other right of recourse, contribution or
reimbursement from the Debtor or other Guarantor and any other
right to payment from the Debtor, arising out of or on account of
any sums paid or agreed to be paid by the Guarantors under this
Guaranty, whether any such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, secured, or unsecured.
7.
Each of the Guarantors will pay or
reimburse the Beneficiary for all costs and expenses (including
reasonable attorneys’ fees and legal expenses) incurred by
the Beneficiary in connection with the successful protection,
defense or enforcement of this Guaranty in any litigation or
bankruptcy