Exhibit 10.35
FORM OF AMENDED AND RESTATED
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GUARANTY AGREEMENT
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1. Guaranty. Each of the undersigned (hereinafter individually and
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collectively referred to as "Guarantor"), for value received, the receipt and
sufficiency of which is hereby acknowledged, and to induce NEON Systems, Inc.,
a Delaware corporation having offices at 00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000,
Xxxxx Xxxx, Xxxxx 00000 (hereinafter called "NSI"), at its option, at any time
or from time to time to loan monies, with or without security to or for the
account of Scalable Software, Inc., a Delaware corporation (hereinafter called
the "Borrower"), and at the special insistence and request of NSI, the
Guarantor hereby unconditionally guarantees the prompt payment at maturity and
the prompt performance when due of the following (hereinafter called the
"Indebtedness"):
All indebtedness, obligations and liabilities of the Borrower to NSI
(and also to others to the extent of participations granted them by
NSI) created by, arising out of, pursuant to and evidenced by the
following described promissory note executed by the Borrower payable to
the order of NSI (and also to others to the extent of participations
granted them by NSI), together with any and all renewals, extensions
for any period and/or rearrangements or modifications thereof (the
"Note"), whether with or without notice to Guarantor and including
accrued interest as provided in such promissory note and expenses, if
any, incurred by NSI to collect such indebtedness, obligations and
liabilities:
Date: June 26, 0000 Xxxxxx: $3,500,000.00
Maturity: June 26, 2005.
The Note represents a renewal extension, rearrangement and modification of that
certain Amended and Restated Promissory Note dated November 14, 2001, in the
principal amount of $3,500,000 executed by Borrower and payable to the order of
NSI as therein provided, as extended by Extension Agreement dated as of March
31, 2002, between Borrower and NSI. Guarantor joined in the execution of said
promissory note guaranteeing the full and prompt payment and performance of all
obligations of the Borrower thereunder (the "Prior Guarantee").
2. Nature of Guaranty. This is an irrevocable, absolute,
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completed and continuing guaranty of payment and not a guaranty of collection,
and no notice of the Indebtedness or any extension of credit already or
hereafter contracted by or extended to Borrower need be given to Guarantor. The
fact that the Indebtedness may be rearranged, modified, reduced, extended for
any period and/or renewed from time to time or paid in full without notice to
the Guarantor shall not release, discharge or reduce the obligation of Guarantor
with respect to the Indebtedness, and Guarantor shall remain fully bound
hereunder. In the event NSI must rescind or restore any payment received by NSI
in satisfaction of the Indebtedness, as set forth herein, any prior release or
discharge from the terms of this Guaranty Agreement given to Guarantor by NSI
shall be without effect, and this Guaranty Agreement shall remain in full force
and effect. It is the intention of Borrower and Guarantor that Guarantor's
obligations hereunder shall not be discharged except by Guarantor's performance
of such obligations and then only to the extent of
such performance. This Guaranty Agreement may be enforced by NSI and any
subsequent holder of the Indebtedness and shall not be discharged by the
assignment or negotiation of all or part of the Indebtedness. This guaranty may
not be revoked by Guarantor and shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Indebtedness is rescinded or must otherwise be returned by NSI upon the
insolvency, bankruptcy, reorganization, receivership or other debtor relief
proceeding involving Borrower, or after any attempted revocation by Guarantor
and after Guarantor's death (in which event this Guaranty Agreement shall be
binding upon Guarantor's estate and Guarantor's heirs and legal
representatives), all as though such payment had not been made. Guarantor
hereby expressly waives presentment, demand, notice of non-payment protest,
notice of protest and dishonor or any other notice whatsoever on any and all
forms of such Indebtedness, and also notice of acceptance of this Guaranty
Agreement, acceptance on the part of NSI being conclusively presumed by its
request for this Guaranty Agreement and delivery of the same to it.
3. NSI's Rights. The Guarantor authorizes NSI, without notice or
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demand and without affecting the Guarantor's liability hereunder, to take and
hold security for the payment of this Guaranty Agreement and/or any of the
Indebtedness, and exchange, enforce, waive and release any such security; and to
apply such security and direct the order or manner of sale thereof as NSI in its
discretion may determine; and to obtain a guaranty of any of the Indebtedness
from any one or more persons, corporations or entities whomsoever and at any
time or times to enforce, waive, rearrange, modify, limit or release such other
persons, corporations or entities from their obligations under such guaranties
and Guarantor hereby acknowledges and agrees that the obligations of all such
persons, corporations or entities to pay and satisfy the Indebtedness pursuant
to their respective guaranties (including Guarantor's obligations under this
Guaranty Agreement) shall be joint and several.
4. Guarantor's Waivers. Guarantor waives any right to require
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NSI to (and it shall not be necessary for NSI, in order to enforce such payment
by Guarantor to first) (a) proceed against Borrower or any other Person liable
on the Indebtedness, (b) proceed against or exhaust any security given to
secure the Indebtedness, (c) have Borrower joined with Guarantor in any suit
arising out of this Guaranty Agreement and/or any of the Indebtedness, (d)
enforce its rights against any other guarantor of the Indebtedness or (e)
pursue or exhaust any other remedy in NSI's power whatsoever. NSI shall not be
required to mitigate damages or take any action to reduce, collect or enforce
the Indebtedness. Guarantor waives any defense arising by reason of any
disability, lack of corporate authority or power, or other defense of Borrower
or any other guarantor of any of the Indebtedness, and shall remain liable
hereon regardless of whether Borrower or any other guarantor be found not
liable thereon for any reason. Guarantor shall have no right of subrogation,
and waives any right to enforce any remedy which NSI now has or may hereafter
have against Borrower, and waives any benefit of any right to participate in
any security now or hereafter held by NSI. The Guarantor hereby waives any
obligation of the Borrower to pay, reimburse or otherwise compensate the
Guarantor for any payments the Guarantor may have to make to the NSI pursuant
to this Guaranty Agreement. In addition, the Guarantor hereby waives any right,
or claims it may now have or hereafter have against the Borrower in connection
with any payments which the Guarantor may have to make to NSI pursuant to this
Guaranty Agreement.
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5. Maturity, Payment. The Guarantor agrees that if the maturity
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of any Indebtedness is accelerated by bankruptcy or otherwise, such maturity
shall also be deemed accelerated for the purpose of this Guaranty Agreement
without demand or notice to the Guarantor. The Guarantor will, forthwith upon
notice from NSI of the Borrower's failure to pay any Indebtedness at maturity,
pay to NSI at the NSI's offices specified in the opening clause of this Guaranty
Agreement, the amount due and unpaid by the Borrower and guaranteed hereby. The
failure of NSI to give this notice shall not in any way release the Guarantor
hereunder.
6. Expenses, Interest. If the Guarantor fails to pay the
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Indebtedness after notice from NSI of the Borrower's failure to pay any
Indebtedness at maturity, and if NSI obtains the services of an attorney for
collection of amounts owing by the Guarantor hereunder, or if suit is filed to
enforce this Guaranty Agreement, or if proceedings are had in any bankruptcy,
probate, receivership or other judicial proceedings for the establishment or
collection of any amount owing by the Guarantor hereunder, or if any amount
owing by the Guarantor hereunder is collected through such proceedings, the
Guarantor agrees to pay to NSI at the NSI's offices NSI's reasonable attorneys'
fees and the Guarantor agrees to pay interest on the amount of any judgment at
the interest rate provided for in the instrument creating or evidencing any of
the Indebtedness or, if such rate cannot be charged to the Guarantor, at the
maximum rate of nonusurious interest allowed by law.
7. Primary Liability. It is expressly agreed that the liability
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of the Guarantor for the payment of the Indebtedness guaranteed hereby shall be
primary and not secondary.
8. Events and Circumstances Not Reducing or Discharging Guarantor's
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Obligations. Guarantor hereby consents and agrees to each of the following, and
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agrees that Guarantor's obligations under this Guaranty Agreement shall not be
released, diminished, impaired, reduced or adversely affected by any of the
following, and waives any rights (including without limitation rights to
notice) which Guarantor might otherwise have as a result of or in connection
with any of the following:
(a) Modifications, etc. Any renewal, extension,
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modification, alteration or rearrangement of all or any part of the
Indebtedness, or of the Note or any instrument executed in connection
therewith, or any contract or understanding between Borrower and NSI,
or any other parties, pertaining to the Indebtedness;
(b) Adjustment, etc. Any adjustment, indulgence,
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forbearance or compromise that might be granted or given by NSI to
Borrower or Guarantor;
(c) Condition of Borrower or Guarantor. The insolvency,
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bankruptcy, arrangement, adjustment, composition, liquidation,
disability, dissolution or lack of power of Borrower or any other party
at any time liable for the payment of all or part of the Indebtedness;
or any dissolution of Borrower, or any sale, lease or transfer of any
or all of the assets of Borrower or Guarantor, or any changes in the
shareholders or members of Borrower; or any reorganization of Borrower
or Guarantor;
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(d) Invalidity of Indebtedness. The invalidity,
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illegality or unenforceability of all or any part of the Indebtedness,
or any document or agreement executed in connection with the
Indebtedness, for any reason whatsoever, including without limitation
the fact that the Indebtedness, or any part thereof, exceeds the amount
permitted by law, the act of creating the Indebtedness or any part
thereof is ultra xxxxx, the officers or representatives executing the
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documents or otherwise creating the Indebtedness acted in excess of
their authority, the Indebtedness violates applicable usury laws, the
Borrower has valid defenses, claims or offsets (whether at law, in
equity or by agreement) which render the Indebtedness wholly or
partially uncollectible from Borrower, the creation, performance or
repayment of the Indebtedness (or the execution, delivery and
performance of any document or instrument representing part of the
Indebtedness or executed in connection with the Indebtedness, or given
to secure the repayment of the Indebtedness) is illegal, uncollectible,
legally impossible or unenforceable, or the other documents or
instruments pertaining to the Indebtedness have been forged or
otherwise are irregular or not genuine or authentic;
(e) Release of Obligors. Any full or partial release of
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the liability of Borrower on the Indebtedness or any part thereof, or
of any co-guarantors, or any other person or entity now or hereafter
liable, whether directly or indirectly, jointly, severally, or jointly
and severally, to pay, perform, guarantee or assure the payment of the
Indebtedness or any part thereof, is being recognized, acknowledged and
agreed by Guarantor that Guarantor may be required to pay the
Indebtedness in full without assistance or support of any other party,
and Guarantor has not been induced to enter into this Guaranty
Agreement on the basis of a contemplation, belief, understanding or
agreement that other parties will be liable to perform the
Indebtedness, or NSI will look to other parties to perform the
Indebtedness;
(f) Other Security. The taking or accepting of any other
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security, collateral or guaranty, or other assurance of payment, for
all or any part of the Indebtedness;
(g) Release of Collateral, etc. Any release, surrender,
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exchange, subordination, deterioration, waste, loss or impairment
(including without limitation negligent, willful, unreasonable or
unjustifiable impairment) of any collateral, property or security, at
any time existing in connection with, or assuring or securing payment
of, all or any part of the Indebtedness;
(h) Care and Diligence. The failure of NSI or any other
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party to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or
any part of such collateral, property or security;
(i) Status of Liens. The fact that any collateral,
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security, security interest or lien contemplated or intended to be
given, created or granted as
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security for the repayment of the Indebtedness shall not be properly
perfected or created, or shall prove to be unenforceable or subordinate
to any other security interest or lien, it being recognized and agreed
by Guarantor that Guarantor is not entering into this Guaranty
Agreement in reliance on, or in contemplation of the benefits of, the
validity, enforceability, collectability or value of any of the
collateral for the Indebtedness;
(j) Preference. Any payment by Borrower to NSI is held
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to constitute a preference under bankruptcy laws, or for any reason NSI
is required to refund such payment or pay such amount to Borrower or
someone else; or
(k) Other Actions Taken or Omitted. Any other action
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taken or omitted to be taken with respect to the Indebtedness or the
security and collateral therefor, whether or not such action or
omission prejudices Guarantor or increases the likelihood that
Guarantor will be required to pay the Indebtedness pursuant to the
terms hereof; it is the unambiguous and unequivocal intention of
Guarantor that Guarantor shall be obligated to pay the Indebtedness
when due, notwithstanding any occurrence, circumstance, event, action,
or omission whatsoever, whether contemplated or uncontemplated, and
whether or not otherwise or particularly described herein, except for
the full and final payment and satisfaction of the Indebtedness.
9. Representations. In order to induce NSI to accept this
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Guaranty Agreement, the Guarantor represents and warrants to NSI (which
representations and warranties will survive the creation of the Indebtedness and
any extension of credit thereunder) that:
(a) Benefit to Guarantor. The Guarantor's guaranty
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pursuant to this Guaranty Agreement reasonably may be expected to
benefit, directly or indirectly, the Guarantor.
(b) Binding Obligations. This Guaranty Agreement
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constitutes valid and binding obligations of the Guarantor, enforceable
in accordance with its terms (except that enforcement may be subject to
any applicable bankruptcy, insolvency or similar laws generally
affecting the enforcement of creditors' rights).
(c) No Legal Bar or Resultant Lien. This Guaranty
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Agreement will not violate any provisions of any contract, agreement,
law, regulation, order, injunction, judgment, decree or writ to which
the Guarantor is subject, or result in the creation or imposition of or
obligation to grant any lien upon any properties of the Guarantor
(other than those, if any, granted hereby).
(d) No Consent. The Guarantor's execution, delivery and
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performance of this Guaranty Agreement does not require the consent or
approval of any other person, including without limitation any
regulatory authority or governmental body of the United States or any
state thereof or any political subdivision of the United States or any
state thereof.
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(e) Familiarity and Reliance. The Guarantor is familiar
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with, and has independently reviewed books and records regarding, the
financial condition of the Borrower and is familiar with the value of
any and all collateral intended to be created as security for the
payment of the Note and Liabilities; provided, however, the Guarantor
is not relying on such financial condition or the collateral as an
inducement to enter into this Guaranty Agreement.
(f) No Representation. Neither NSI nor any other person,
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corporation or entity has made any representation, warranty or
statement to the Guarantor with regard to the Borrower or its financial
condition in order to induce the Guarantor to execute this Guaranty
Agreement.
(g) Guarantor's Financial Condition. As of the date
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hereof and after giving effect to this Guaranty Agreement and the
contingent liability evidenced hereby, Guarantor is and will be
solvent, and has assets which, fairly valued, exceed its obligations,
liabilities and debts.
10. Successors and Assigns. This Guaranty Agreement is and shall
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be in every particular available to the successors and assigns of NSI and is and
shall always be fully binding upon the heirs, legal representatives, successors
and assigns of the Guarantor, notwithstanding that some or all of the monies,
the repayment of which this Guaranty Agreement applies, may be actually advanced
after any bankruptcy, receivership, reorganization or other event affecting the
Guarantor.
11. Notices. Any notice or demand to the Guarantor under or in
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connection with this Guaranty Agreement may be given and shall conclusively be
deemed and considered to have been given and received upon the deposit thereof,
in writing, duly stamped and addressed to the Guarantor at the address of the
Guarantor appearing on the records of NSI, in the United States mail, but actual
notice, however given or received, shall always be effective.
12. Release. This Guaranty Agreement shall terminate and each
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Guarantor shall be released from his obligations hereunder on the effective date
of the merger of the Borrower with and into NSI pursuant to the "Agreement and
Plan of Merger" (as defined in the Note).
13. Prior Guaranty. This Guaranty Agreement amends and restates
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in its entirety the Prior Guarantee.
14. Governing Law. This Guaranty Agreement is a contract made
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under and shall be construed in accordance with and governed by the laws of the
Xxxxx xx Xxxxx, xxx xx xxx Xxxxxx Xxxxxx of America.
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WITNESS THE EXECUTION HEREOF, this the _____ day of June, 2002.
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