Exhibit 10.6
SUBSIDIARY GUARANTEE
SUBSIDIARY
GUARANTEE, dated as of December 6, 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 ”)
to that certain Securities Purchase Agreement, dated as of the date
hereof, between Ecotality, Inc., a Nevada corporation (the “
Company ”) and the Purchasers.
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 the Purchasers have agreed to purchase from the
Company the Company’s Secured Convertible Debentures, due
June , 2010 (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 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 and used herein shall have the meanings
given to them in the 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 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
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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
hereunder without impairing the guarantee
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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
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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 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 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 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,
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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
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 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, bankruptcy, dissolution,
liquidation or reorga
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