SUBSIDIARY GUARANTY
July 8, 2005
FOR VALUE RECEIVED, and in consideration of note
purchases from, loans made or to be made or credit otherwise
extended or to be extended to or for the account of Axeda Systems
Inc., a Delaware corporation (the “ Company ”)
by the persons identified as “Purchasers” (the “
Purchasers ”) in that certain Senior Secured Bridge
Note Purchase Agreement, dated as of July 8, 2005, among the
Company, the Guarantor (defined below) and the Purchasers (as may
be hereafter amended, modified, substituted, extended or restated
from time to time, including any replacement agreement therefore,
the “ Purchase Agreement ”), from time to time
and at any time and for other good and valuable consideration and
to induce the Purchasers, in their discretion, to purchase such
notes, make such loans or extensions of credit and to make or grant
such renewals, extensions, releases of collateral or
relinquishments of legal rights as the Purchasers may deem
advisable, Axeda Systems Operating Company, Inc., a Massachusetts
corporation and indirect wholly-owned subsidiary of the Company
(the “ Guarantor ”), unconditionally guaranties
to the Purchasers, their 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 the Purchasers 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 the Purchasers, 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 the Purchasers, whether arising
under, out of, or in connection with (i) the Purchase Agreement and
(ii) each of the other Bridge Loan Documents (as defined in the
Purchase Agreement), or any documents, instruments or agreements
relating to or executed in connection with the Bridge Loan
Documents or any documents, instruments or agreements referred to
therein or otherwise, or any other indebtedness, obligations or
liabilities of the Company to the Purchasers, 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 Purchase Agreement. In furtherance of the
foregoing, the Guarantor hereby agrees as follows:
1. No
Impairment . The Purchasers may at any time and from time to
time, either before or after the maturity thereof, without notice
to or further consent of the Guarantor, 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 the Purchasers and
the Company or any such other party or person, or make any election
of rights the Purchasers 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 instrument
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.
Subsidiary Guaranty - Page
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2. Guaranty
Absolute . Subject to Section 5(c), the Guarantor guarantees
that the Obligations will be paid strictly in accordance with the
terms of the Bridge Loan 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. The Guarantor hereby
knowingly accepts the full range of risk encompassed within a
contract of “continuing guaranty” which risk includes
the possibility that the Company will contract additional
indebtedness for which the Guarantor 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
indebtedness. The Guarantor acknowledges that no oral
representations, including any representations to extend credit or
provide other financial accommodations to the Company, have been
made by the Purchasers to induce the Guarantor to enter into this
Guaranty. The liability of the Guarantor 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 Bridge Loan 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 Bridge Loan 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 the Purchasers or their assignees or any acceptance
thereof or any release of any security by the Purchasers or their
assignees; (d) any limitation on any party's liability or
obligation under the Bridge Loan 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 Guarantor shall have notice or knowledge of any of the
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
Guarantor. Any amounts due from the Guarantor to the Purchasers
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.
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(a) This
Guaranty is a guaranty of payment and not of collection. The
Purchasers shall be under no obligation to institute suit, exercise
rights or remedies or take any other action against the Company or
any other person 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 Guarantor being
obligated to perform as agreed herein and the Guarantors hereby
waives any and all rights which it may have by statute or otherwise
which would require the Purchasers to do any of the foregoing. The
Guarantor further consents and agrees that the Purchasers shall be
under no obligation to marshal any assets in favor of Guarantor, or
against or in payment of any or all of the Obligations. The
Guarantor hereby waives all suretyship defenses and any rights to
interpose any defense, counterclaim or offset of any nature and
description which the Guarantor may have or which may exist between
and among the Purchasers, the Company and/or the Guarantor with
respect to the Guarantor'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 pay
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