|
Exhibit 10.23
SUBSIDIARY GUARANTEE
THIS SUBSIDIARY GUARANTEE (this " Guarantee "),
dated as of February 6, 2007, made by each of the undersigned
guarantors (together with any other entity that may become an
additional guarantor hereunder, the " Guarantors "),
in favor of the purchasers (the " Purchasers ") of
Senior Secured Debentures, dated as of the date hereof (the "
Debentures "), issued by Digital Angel Corporation, a
Delaware corporation (the " Company "), and Imperium
Advisers, LLC, as the Collateral Agent (the " Collateral
Agent "). Capitalized terms used herein and not
otherwise defined shall have the respective meanings specified in
the Purchase Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Securities Purchase Agreement,
dated as of the date hereof, by and between the Company and the
Purchasers (the " Purchase Agreement "), the Company
has agreed to sell and issue to the Purchasers, and each of the
Purchasers has agreed to purchase from the Company the Debentures;
and
WHEREAS, each Guarantor, as a subsidiary of the Company, will
directly or indirectly benefit from the extension of credit to the
Company represented by the issuance of the Debentures.
NOW, THEREFORE, in consideration of the agreements herein
contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1.
GUARANTEE .
1.1
Guarantee of Obligations .
(a)
Each Guarantor hereby, jointly and severally, unconditionally and
irrevocably, guarantees to each Purchaser and its lawful
successors, endorsees, 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 all
obligations and undertakings of the Company of whatever nature,
monetary or otherwise, under the Debentures, the Purchase
Agreement, the Warrants, the Registration Rights Agreement, the
Security Agreement and the other Transaction Documents, together
with all reasonable attorneys’ fees, disbursements and all
other costs and expenses of collection incurred by Purchasers in
enforcing any of such Obligations and/or this Guarantee
(collectively, the " Obligations "). This
Guarantee shall remain in full force and effect until all the
Obligations and the obligations of each Guarantor under this
Guarantee shall have been satisfied by payment and performance in
full. Each Guarantor shall be regarded, and shall be in the
same position, as principal debtor with respect to the
Obligations.
(b)
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 1.3 of this
Guarantee).
1.2
Guarantee Absolute and Unconditional . Each Guarantor
understands and agrees that this Guarantee shall be construed as a
continuing, absolute and unconditional guarantee of payment and
performance without regard to (a) the validity or enforceability of
the Purchase Agreement 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 this Guarantee, in bankruptcy or in any
other instance.
1.3
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 1.4 of this Guarantee. The provisions of this
Section 1.3 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.
1.4
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 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
benefit of 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.
1.5
Modification of Guaranteed 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
2
to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Purchasers, and the Purchase
Agreement 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 this Guarantee or any property subject thereto.
1.6
Waiver . 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 guarantees contained in this Section 1 or
acceptance of the guarantees contained in this Section
1 . The Obligations shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon the guarantees contained in
this Section 1 . All dealings between the
Company and any of the Guarantors, on the one hand, and the
Purchasers, on the other hand, shall be conclusively presumed to
have been had or consummated in reliance upon the guarantees
contained in this Section 1 . 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.
1.7
Enforcement of Guarantee .
(a)
When making any demand hereunder or otherwise pursuing its rights
and remedies hereunder against any Guarantor, the Collateral Agent,
acting on behalf of each Purchaser, may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such
rights and remedies as the Collateral Agent, acting on behalf of
the Purchasers, 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 Collateral Agent, acting on behalf of 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.
(b)
Expenses; Indemnification .
(i)
Each Guarantor agrees to pay, or reimburse the Collateral Agent,
acting on behalf of the Purchasers, all of the Collateral
Agent’s costs and expenses incurred in collecting against
such Guarantor under this Guarantee or otherwise enforcing or
preserving any rights under this Guarantee and the other
Transaction Documents to which such Guarantor is a
3
party, including, without limitation, the
reasonable fees and disbursements of counsel to the Collateral
Agent.
(ii) Each
Guarantor agrees to pay, and to save the Purchasers harmless from,
any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes
which may be payable or determined to be payable in connection with
any of the transactions contemplated by this Guarantee.
(iii) Each
Guarantor agrees to pay, and to save the Purchasers harmless from,
any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Guarantee to
the extent the Company would be required to do so pursuant to the
Purchase Agreement.
(iv)
[Reserved]
(v)
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.
1.8
Right to Set-Off . Each Guarantor hereby irrevocably
authorizes the Collateral Agent, acting on behalf of the
Purchasers, at any time and from time to time while an Event of
Default (as defined in the Debentures) under any of the Transaction
Documents shall have occurred and be continuing, without notice to
such Guarantor or any other Guarantor, any such notice being
expressly waived by each Guarantor, to set-off and appropriate and
apply any and all deposits, credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by a
Purchaser to or for the credit or the account of such Guarantor, or
any part thereof in such amounts as the Collateral Agent may elect,
against and on account of the obligations and liabilities of such
Guarantor to the Purchasers hereunder in any currency arising
hereunder or under the Security Agreement as the Collateral Agent
may elect, whether or not a Purchaser has made any demand for
payment and although such obligations, liabilities and claims may
be contingent or unmatured. The Collateral Agent shall notify
such Guarantor promptly of any such set-off and the application
made by the Collateral Agent of the proceeds thereof,
provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of
each Purchaser under this Section 1.8 are in addition
to other rights and remedies (including, without limitation, other
rights of set-off) which the Collateral Agent, acting on behalf of
the Purchas
|
