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Exhibit 10.3
SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE, dated as of June 12, 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 Blink Logic 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 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 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,
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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)).
(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
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Guarantor under the guarantee contained in this
Section 2 shall have been paid in full or otherwise fully satisfied
and discharged.
(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.
(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
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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,
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)
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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.
(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 reorganiza
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