Exhibit 10.3
GUARANTY AGREEMENT
1. Identification.
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This Guaranty Agreement (the "Guaranty"), dated as of December 29, 2005, is
entered into by and between FTS Wireless Inc., a Nevada corporation (each
referred to as "Guarantor" and collectively "Guarantors"herein) and Xxxxxxx
Xxxxxxx, as collateral agent acting in the manner and to the extent described in
the Collateral Agent Agreement defined below (the "Collateral Agent"), for the
benefit of the parties identified on Schedule A hereto (each a "Lender" and
collectively, the "Lenders").
2. Recitals.
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2.1 Guarantors are direct or indirect wholly-owned subsidiary of FTS
Group Inc., a Nevada corporation ("FTS Group"). The Lenders have made and are
making loans to FTS Group (the "Loans"). Guarantor will obtain substantial
benefit from the proceeds of the Loans.
2.2 The Loans are and will be evidenced by certain convertible
promissory notes (each a "Convertible Note" and collectively, the "Convertible
Notes") issued by FTS Group on or about the date of this Agreement pursuant to
subscription agreements ("Subscription Agreements"). The Convertible Notes are
further identified on Schedule A hereto and were and will be executed by FTS
Group as "Borrower" or "Debtor" for the benefit of each Lender as the "Holder"
or "Lender" thereof.
2.3 In consideration of the Loans made by Lenders to FTS Group and for
other good and valuable consideration, and as security for the performance by
FTS Group of its obligations under the Convertible Notes and as security for the
repayment of the Loans and all other sums due from Debtor to Lenders arising
under the Convertible Notes, Subscription Agreements, Collateral Agent Agreement
and any other agreement between or among them relating to the foregoing
(collectively, the "Obligations"), Guarantor, for good and valuable
consideration, receipt of which is acknowledged, has agreed to enter into this
Agreement with the Collateral Agent, for the benefit of the Lenders.
Obligations include all future advances by Lenders to FTS Group made by all
Lenders on substantially the same terms and in proportion to their interests in
the Obligations.
2.4 The Lenders have appointed Xxxxxxx Xxxxxxx as Collateral Agent
pursuant to that certain Collateral Agent Agreement dated at or about December
29, 2005 ("Collateral Agent Agreement"), among the Lenders and Collateral Agent.
3. Guaranty.
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3.1 Guaranty. Guarantors hereby unconditionally and irrevocably
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guarantee jointly and severally the punctual payment, performance and observance
when due, whether at stated maturity, by acceleration or otherwise, of all of
the Obligations now or hereafter existing, whether for principal, interest
(including, without limitation, all interest that accrues after the commencement
of any insolvency, bankruptcy or reorganization of FTS Group, whether or not
constituting an allowed claim in such proceeding), fees, commissions, expense
reimbursements, liquidated damages, indemnifications or otherwise (such
obligations, to the extent not paid by FTS Group being the "Guaranteed
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Obligations"), and agrees to pay any and all costs, fees and expenses (including
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reasonable counsel fees and expenses) incurred by Collateral Agent and the
Lenders in enforcing any rights under the guaranty set forth herein. Without
limiting the generality of the foregoing, Guarantor's liability shall extend to
all amounts that constitute part of the Guaranteed Obligations and would be owed
by FTS Group to Collateral Agent and the Lenders, but for the fact that they are
unenforceable or not allowable due to the existence of an insolvency, bankruptcy
or reorganization involving FTS Group.
3.2 Guaranty Absolute. Guarantor guarantees that the Guaranteed Obligations
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will be paid strictly in accordance with the terms of the Convertible Notes,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of Collateral Agent or
the Lenders with respect thereto. The obligations of Guarantor under this
Agreement are independent of the Guaranteed Obligations, and a separate action
or actions may be brought and prosecuted against Guarantor to enforce such
obligations, irrespective of whether any action is brought against FTS Group or
any other Guarantor or whether FTS Group or any other Guarantor is joined in any
such action or actions. The liability of Guarantor under this
Agreementconstitutes a primary obligation, and not a contract of surety, and
shall be irrevocable, absolute and unconditional irrespective of, and Guarantor
hereby irrevocably waives any defenses it may now or hereafter have in any way
relating to, any or all of the following:
(a) any lack of validity or enforceability of the Convertible Notes or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Guaranteed Obligations, or any other amendment or
waiver of or any consent to departure from the Convertible Notes, including,
without limitation, any increase in the Guaranteed Obligations resulting from
the extension of additional credit to FTS Group or otherwise;
(c) any taking, exchange, release, subordination or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed Obligations;
(d) any change, restructuring or termination of the corporate, limited
liability company or partnership structure or existence of FTS Group; or
(e) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by Collateral
Agent or the Lenders that might otherwise constitute a defense available to, or
a discharge of, FTS Group or any other guarantor or surety.
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by Collateral Agent, the Lenders or any other
entity upon the insolvency, bankruptcy or reorganization of the FTS Group or
otherwise (and whether as a result of any demand, settlement, litigation or
otherwise), all as though such payment had not been made.
3.3 Waiver. Guarantor hereby waives promptness, diligence, notice of
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acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Agreement and any requirement that Collateral Agent or the
Lenders or exhaust any right or take any action against any Borrower or any
other person or entity or any Collateral. Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated herein and that the waiver set forth in this Section 3.3 is
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knowingly made in contemplation of such benefits. Guarantor hereby waives any
right to revoke this Agreement, and acknowledges that this Agreement is
continuing in nature and applies to all Guaranteed Obligations, whether existing
now or in the future.
3.4 Continuing Guaranty; Assignments. This Agreement is a continuing
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guaranty and shall (a) remain in full force and effect until the later of the
indefeasible cash payment in full of the Guaranteed Obligations and all other
amounts payable under this Agreement, the Subscription Agreements and
Convertible Notes, (b) be binding upon Guarantor, its successors and assigns and
(c) inure to the benefit of and be enforceable by Collateral Agent and the
Lenders and their successors, pledgees, transferees and assigns. Without
limiting the generality of the foregoing clause (c), the Collateral Agent and
any Lender may pledge, assign or otherwise transfer all or any portion of its
rights and obligations under this Agreement (including, without limitation, all
or any portion of its Convertible Notes owing to it) to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted such Collateral Agent or Lender herein or otherwise.
3.5 Subrogation. No Guarantor will exercise any rights that it may now
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or hereafter acquire against the Collateral Agent or any Lender or other
Guarantor (if any) that arise from the existence, payment, performance or
enforcement of such Guarantor's obligations under this Agreement, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from the Collateral Agent or any Lender
or other Guarantor (if any), directly or indirectly, in cash or other property
or by set-off or in any other manner, payment or security solely on account of
such claim, remedy or right, unless and until all of the Guaranteed Obligations
and all other amounts payable under this Agreement shall have been indefeasibly
paid in full in cash. If (i) any Guarantor shall make payment to Collateral
Agent, or the Lenders of all or any part of the Guaranteed Obligations, and (ii)
of all or any of the Guaranteed Obligations and all other amounts payable under
this Agreement such payments shall be paid in full in cash.
3.6 Maximum Obligations. Notwithstanding any provision herein contained
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to the contrary, Guarantor's liability with respect to the Obligations shall be
limited to an amount not to exceed, as of any date of determination, the amount
that could be claimed by Lenders from Guarantor without rendering such claim
voidable or avoidable under Section 548 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law.
4. Miscellaneous.
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4.1 Expenses. Guarantor shall pay to the Collateral Agent, on demand,
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the amount of any and all reasonable expenses, including, without limitation,
attorneys' fees, legal expenses and brokers' fees, which the Collateral Agent
may incur in connection with (a) exercise or enforcement of any the rights,
remedies or powers of the Collateral Agent hereunder or with respect to any or
all of the Obligations; or (b) failure by Guarantor to perform and observe any
agreements of Guarantor contained herein which are performed by the Collateral
Agent.
4.2 Waivers, Amendment and Remedies. No course of dealing by the
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Collateral Agent and no failure by the Collateral Agent to exercise, or delay by
the Collateral Agent in exercising, any right, remedy or power hereunder shall
operate as a waiver thereof, and no single or partial exercise thereof shall
preclude any other or further exercise thereof or the exercise of any other
right, remedy or power of the Collateral Agent. No amendment, modification or
waiver of any provision of this Agreement and no consent to any departure by
Guarantor therefrom, shall, in any event, be effective unless contained in a
writing signed by the Collateral Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. The rights, remedies and powers of the Collateral Agent, not only
hereunder, but also under any instruments and agreements evidencing or securing
the Obligations and under applicable law are cumulative, and may be exercised by
the Collateral Agent from time to time in such order as the Collateral Agent may
elect.
4.3 Notices. All notices or other communications given or made
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hereunder shall be in writing and shall be personally delivered or deemed
delivered the first business day after being faxed (provided that a copy is
delivered by first class mail) to the party to receive the same at its address
set forth below or to such other address as either party shall hereafter give to
the other by notice duly made under this Section:
To FTS Group and
Guarantor, to:
c/o FTS Group Inc.
0000 Xxxx Xxxxxxxxxxxx Xxxxxx
Xxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx, CEO
Fax: (000) 000-0000
With a copy by telecopier only to:
Xxx Xxxxxxx, Esq.
Xxxxxxx Business Law
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Fax: (000) 000-0000
To Lenders: To the addresses and telecopier numbers set
forth on Schedule A
To the Collateral Agent:
Xxxxxxx X. Xxxxxxx
Xxxxxxx & Xxxxxxx, P.C.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Any party may change its address by written notice in accordance with this
paragraph.
4.4 Term; Binding Effect. This Agreement shall (a) remain in full
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force and effect until payment and satisfaction in full of all of the
Obligations; (b) be binding upon Guarantor and its successors and permitted
assigns; and (c) inure to the benefit of the Collateral Agent, for the benefit
of the Lenders and their respective successors and assigns. All the rights and
benefits granted by Guarantor to the Collateral Agent and Lenders hereunder and
other agreements and documents delivered in connection therewith are deemed
granted to both the Collateral Agent and Lenders. Upon the payment in full of
the Obligations, (i) this Agreement shall terminate and (ii) Collateral Agent
will, upon Guarantor's request and at Guarantor's expense, execute and deliver
to Guarantor such documents as Guarantor shall reasonably request to evidence
such termination, all without any representation, warranty or recourse
whatsoever.
4.5 Captions. The captions of Paragraphs, Articles and Sections in
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this Agreement have been included for convenience of reference only, and shall
not define or limit the provisions hereof and have no legal or other
significance whatsoever.
4.6 Governing Law; Venue; Severability. This Agreement shall be
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governed by and construed in accordance with the laws of the State of New York
without regard to principles of conflicts or choice of law, except to the extent
that the perfection of the security interest granted hereby in respect of any
item of Collateral may be governed by the law of another jurisdiction. Any
legal action or proceeding against Guarantor with respect to this Agreement may
be brought in the courts of the State of New York or of the United States for
the Southern District of New York, and, by execution and delivery of this
Agreement, Guarantor hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Guarantor hereby irrevocably waives any objection which they may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement brought in the
aforesaid courts and hereby further irrevocably waives and agrees not to plead
or claim in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum. If any provision of this
Agreement, or the application thereof to any person or circumstance, is held
invalid, such invalidity shall not affect any other provisions which can be
given effect without the invalid provision or application, and to this end the
provisions hereof shall be severable and the remaining, valid provisions shall
remain of full force and effect.
4.7 Satisfaction of Obligations. For all purposes of this Agreement, the
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payment in full of the Obligations shall be conclusively deemed to have occurred
when either the Obligations have been indefeasibly paid in cash or all
outstanding Convertible Notes have been converted to common stock pursuant to
the terms of the Convertible Notes and the Subscription Agreements.
4.8 Counterparts/Execution. This Agreement may be executed in any
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number of counterparts and by the different signatories hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument. This
Agreement may be executed by facsimile signature and delivered by facsimile
transmission.
[THIS SPACE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned have executed and delivered this Guaranty
Agreement, as of the date first written above.
"GUARANTOR" "THE COLLATERAL AGENT"
FTS WIRELESS INC. XXXXXXX X. XXXXXXX
a Nevada corporation
By:______________________________________
Its:_______________________________________
APPROVED BY "LENDERS":
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_______________________________________ ________________________________
ALPHA CAPITAL AKTIENGESELLSCHAFT BRISTOL INVESTMENT FUND, LTD.
_______________________________________ ________________________________
_______________________________________
WHALEHAVEN CAPITAL FUND LIMITED XXXXX INTERNATIONAL LTD.
_______________________________________ ________________________________
OMEGA CAPITAL SMALL CAP FUND CMS CAPITAL
_______________________________________
VERTICAL VENTURES
This Guaranty Agreement may be signed by facsimile signature and
delivered by confirmed facsimile transmission.
