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EXHIBIT 10.5
SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE, dated as of April 30, 2008
(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 (together with their
permitted assigns, the “ Purchasers ”) to that
certain Securities Purchase Agreement, dated as of the date hereof,
between GigaBeam Corporation, a Delaware 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 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.
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“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 the Company or any
Guarantor to the Purchasers, including, without limitation, all
obligations under this Guarantee, the Debentures 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 Purchasers 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 Company or any Guarantor from time to time under or in
connection with this Guarantee, the Debentures 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 the Company or any Guarantor.
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 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)).
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(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 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 indefeasible
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 indefeasibly paid in
full.
(vi)
Notwithstanding anything to the contrary in this
Guarantee, 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 . Subject to
Section 2(c), 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.
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(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 respect of payments made by such Guarantor
hereunder, until all amounts owing to the Purchasers by the
Company on account of the Obligations are indefeasibly 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.
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(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 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 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.
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(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
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