Exhibit 10.6
SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE, dated as of August
20, 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,
whether now or hereafter existing, voluntary or involuntary, direct
or indirect,
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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 upo
