Exhibit 10.34
SUBSIDIARY GUARANTY
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| New York, New York |
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August 31, 2007 |
FOR VALUE
RECEIVED, and in consideration of note purchases from, or credit
otherwise extended or to be extended by Kallina Corporation
(“Lender”) to or for the account of Applied Digital
Solutions, Inc., a Delaware corporation (the
“Company”), from time to time and at any time and for
other good and valuable consideration and to induce Lender, in its
discretion, to purchase such notes or make other extensions of
credit and to make or grant such renewals, extensions, releases of
collateral or relinquishments of legal rights as Lender may deem
advisable, each of the undersigned (and each of them if more than
one, the liability under this Guaranty being joint and several)
(jointly and severally referred to as “Guarantors “ or
“the undersigned”) unconditionally guaranties to
Lender, its successors, endorsees and assigns the prompt payment
when due (whether by acceleration or otherwise) of all present and
future obligations and liabilities of any and all kinds of the
Company to Lender and of all instruments of any nature evidencing
or relating to any such obligations and liabilities upon which the
Company or one or more parties and the Company is or may become
liable to Lender, whether incurred by the Company as maker,
endorser, drawer, acceptor, guarantors , accommodation party or
otherwise, and whether due or to become due, secured or unsecured,
absolute or contingent, joint or several, and however or whenever
acquired by Lender, whether arising under, out of, or in connection
with (i) that certain Securities Purchase Agreement dated as
of the date hereof by and between the Company and Lender (the
“Securities Purchase Agreement”) and (ii) each
Related Agreement (other than the Registration Rights Agreement)
referred to in the Securities Purchase Agreement (the Securities
Purchase Agreement and each Related Agreement, as each may be
amended, modified, restated and/or supplemented from time to time,
are collectively referred to herein as the
“Documents”), or any documents, instruments or
agreements relating to or executed in connection with the Documents
or any documents, instruments or agreements referred to therein or
otherwise, or any other obligations or liabilities of the Company
to Lender, whether now existing or hereafter arising, direct or
indirect, liquidated or unliquidated, absolute or contingent, due
or not due and whether under, pursuant to or evidenced by a note,
agreement, guaranty, instrument or otherwise (all of which are
herein collectively referred to as the “Obligations”),
and irrespective of the genuineness, validity, regularity or
enforceability of such Obligations, or of any instrument evidencing
any of the Obligations or of any collateral therefor or of the
existence or extent of such collateral, and irrespective of the
allowability, allowance or disallowance of any or all of the
Obligations in any case commenced by or against the Company under
Title 11, United States Code, including, without limitation,
obligations or indebtedness of the Company for post-petition
interest, fees, costs and charges that would have accrued or been
added to the Obligations but for the commencement of such case.
Terms not otherwise defined herein shall have the meaning assigned
such terms in the Securities Purchase Agreement. In furtherance of
the foregoing, the undersigned hereby agrees as follows:
1. No
Impairment . Lender may at any time and from time to time,
either before or after the maturity thereof, without notice to or
further consent of the undersigned, extend the time of payment of,
exchange or surrender any collateral for, renew or extend any of
the Obligations or increase or decrease the interest rate thereon,
or any other agreement with the Company or with any other party to
or person liable on any of the Obligations, or interested therein,
for the extension, renewal, payment, compromise, discharge or
release thereof, in whole or in part, or for any modification of
the terms thereof or of any agreement between Lender and the
Company or any such other party or person, or make any election of
rights Lender may deem desirable under the United States Bankruptcy
Code, as amended, or any other federal or state bankruptcy,
reorganization, moratorium or insolvency law relating to or
affecting the enforcement of creditors’ rights generally (any
of the foregoing, an “Insolvency Law”) without in any
way impairing or affecting this Guaranty. This Guaranty shall be
effective regardless of the subsequent incorporation, merger or
consolidation of the Company, or any change in the composition,
nature, personnel or location of the Company and shall extend to
any successor entity to the Company, including a debtor in
possession or the like under any Insolvency Law.
2.
Guaranty Absolute . Subject to Section 5(c) hereof, each of
the undersigned jointly and severally guarantees that the
Obligations will be paid strictly in accordance with the terms of
the Documents and/or any other document, instrument or agreement
creating or evidencing the Obligations, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Company with
respect thereto. Guarantors hereby knowingly accept the full range
of risk encompassed within a contract of “continuing
guaranty” which risk includes the possibility that the
Company will contract additional obligations and liabilities for
which Guarantors may be liable hereunder after the Company’s
financial condition or ability to pay its lawful debts when they
fall due has deteriorated, whether or not the Company has properly
authorized incurring such additional obligations and liabilities.
The undersigned acknowledge that (i) no oral representations,
including any representations to extend credit or provide other
financial accommodations to the Company, have been made by Lender
to induce the undersigned to enter into this Guaranty and
(ii) any extension of credit to the Company shall be governed
solely by the provisions of the Documents. The liability of each of
the undersigned under this Guaranty shall be absolute and
unconditional, in accordance with its terms, and shall remain in
full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any
circumstance or occurrence whatsoever, including, without
limitation: (a) any waiver, indulgence, renewal, extension,
amendment or modification of or addition, consent or supplement to
or deletion from or any other action or inaction under or in
respect of the Documents or any other instruments or agreements
relating to the Obligations or any assignment or transfer of any
thereof, (b) any lack of validity or enforceability of any
Document or other documents, instruments or agreements relating to
the Obligations or any assignment or transfer of any thereof,
(c) any furnishing of any additional security to Lender or its
assignees or any acceptance thereof or any release of any security
by Lender or its assignees, (d) any limitation on any
party’s liability or obligation under the Documents or any
other documents, instruments or agreements relating to the
Obligations or any assignment or transfer of any thereof or any
invalidity or unenforceability, in whole or in part, of any such
document, instrument or agreement or any term thereof, (e) any
bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to the
Company, or any action taken with respect to this Guaranty by any
trustee or receiver, or by any court, in any such proceeding,
whether or not the undersigned shall have notice or knowledge of
any of the
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foregoing, (f) any exchange, release or nonperfection of any
collateral, or any release, or amendment or waiver of or consent to
departure from any guaranty or security, for all or any of the
Obligations or (g) any other circumstance which might
otherwise constitute a defense available to, or a discharge of, the
undersigned. Any amounts due from the undersigned to Lender shall
bear interest until such amounts are paid in full at the highest
rate then applicable to the Obligations. Obligations include
post-petition interest whether or not allowed or allowable.
3.
Waivers .
(a) This Guaranty is a guaranty of payment and not of
collection. Lender shall be under no obligation to institute suit,
exercise rights or remedies or take any other action against the
Company or any other person or entity liable with respect to any of
the Obligations or resort to any collateral security held by it to
secure any of the Obligations as a condition precedent to the
undersigned being obligated to perform as agreed herein and each of
the Guarantors hereby waives any and all rights which it may have
by statute or otherwise which would require Lender to do any of the
foregoing. Each of the Guarantors further consents and agrees that
Lender shall be under no obligation to marshal any assets in favor
of Guarantors, or against or in payment of any or all of the
Obligations. The undersigned hereby waives all suretyship defenses
and any rights to interpose any defense, counterclaim or offset of
any nature and description which the undersigned may have or which
may exist between and among Lender, the Company and/or the
undersigned with respect to the undersigned’s obligations
under this Guaranty, or which the Company may assert on the
underlying debt, including but not limited to failure of
consideration, breach of warranty, fraud, payment (other than cash
payment in full of the Obligations), statute of frauds, bankruptcy,
infancy, statute of limitations, accord and satisfaction, and
usury.
(b) Each of the undersigned further waives (i) notice of
the acceptance of this Guaranty, of the extensions of credit, and
of all notices and demands of any kind to which the undersigned may
be entitled, including, without limitation, notice of adverse
change in the Company’s financial condition or of any other
fact which might materially increase the risk of the undersigned
and (ii) presentment to or demand of payment from anyone
whomsoever liable upon any of the Obligations, protest, notices of
presentment, non-payment or protest and notice of any sale of
collateral security or any default of any sort.
(c) Notwithstanding any payment or payments made by the
undersigned hereunder, or any setoff or application of funds of the
undersigned by Lender, the undersigned shall not be entitled to be
subrogated to any of the rights of Lender against the Company or
against any collateral or guarantee or right of offset held by
Lender for the payment of the Obligations, nor shall the
undersigned seek or be entitled to seek any contribution or
reimbursement from the Company in respect of payments made by the
undersigned hereunder, until all amounts owing to Lender by the
Company on account of the Obligations are indefeasibly paid in full
and Lender’s obligation to extend credit pursuant to the
Documents has been irrevocably terminated. If, notwithstanding the
foregoing, any amount shall be paid to the undersigned on account
of such subrogation rights at any time when all of the Obligations
shall not have been paid in full and Lender’s obligation to
extend credit pursuant to the Documents shall not have been
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terminated,
such amount shall be held by the undersigned in trust for Lender,
segregated from other funds of the undersigned, and shall forthwith
upon, and in any event within two (2) business days of,
receipt by the undersigned, be turned over to Lender in the exact
form received by the undersigned (duly endorsed by the undersigned
to Lender, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as Lender may
determine, subject to the provisions of the Documents. Any and all
present and future obligations and liabilities of the Company to
any of the undersigned are hereby waived and postponed in favor of,
and subordinated to the full payment and performance of, all
Obligations of the Company to Lender.
4.
Security . All sums at any time to the credit of the
undersigned and any property of the undersigned in Lender’s
possession or in the possession of any bank, financial institution
or other entity that directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common
control with, Lender (each such entity, an “Affiliate”)
shall be deemed held by Lender or such Affiliate, as the case may
be, as security for any and all of the undersigned’s
obligations and liabilities to Lender and to any Affiliate of
Lender, no matter how or when arising and whether under
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