Document:

Exhibit
10.7

 

 

GUARANTY

 

This
Guaranty (this “Guaranty”) is
made and given as of the Execution Date by Counsel Corporation, an Ontario
corporation (“Guarantor”), in
favor of Acceris
Management and Acquisition LLC, a Minnesota limited liability
company
(“Buyer”).
Capitalized terms used but not defined in this Guaranty shall have the meanings
ascribed to them in the Asset Purchase Agreement between Guarantor, Buyer and
certain other parties (the “Purchase
Agreement”).

 

RECITALS

 

	A.    	
      If
      the Purchase Agreement is terminated (other than in accordance with
      Section 10.1(c) of the Purchase Agreement) before the Closing, Section
      5.11 of the Purchase Agreement provides that Buyer is entitled to recover
      certain advances and fees pursuant to written agreements between Buyer and
      the Seller Parties under the Purchase Agreement (collectively, the
      “Break
      Up Fee”).
      

 

	B.    	
      As
      security for the Break Up Fee that is owed or will be owed to Buyer,
      ACI
      and the Company have delivered to Buyer (a) a Note, whereby the principal
      amount will be equal to the Break Up Fee (the “Note”),
      (b) a Security Agreement which secures the Note with all of the assets of
      the Company, ACI, and any of the assets upon which Wells Fargo Foothill,
      Inc., a California corporation, has a first lien, and (c) this Guaranty.
      

 

	
      C.
	
      As
      a condition to entering the Purchase Agreement, Buyer has required that
      Guarantor deliver this Guaranty as security for ACI’s and the Company’s
      obligations under the Note. 

 

	
      D.
	
      Guarantor
      expects to derive benefits, direct and indirect, from the Purchase
      Agreement, the Note, the Security Agreement and transactions contemplated
      thereby and Guarantor finds it advantageous, desirable and in its best
      interests to execute and deliver this Guaranty to
Buyer.

 

GUARANTY

 

In
consideration of the above recitals and for other good and valuable
consideration, each Guarantor hereby covenants and agrees with Buyer as
follows:

 

	
      1.
	
      Defined
      Terms.
      As used in this Guaranty, the following terms shall have the meaning
      indicated:

 

	 	
      (a)
	
      For
      purposes of this Guaranty, “Obligations”
      means collectively the Note, the Security Agreement and the repayment or
      performance of any of the foregoing if any such payment or performance is
      at any time avoided, rescinded, set aside, or recovered from or repaid by
      Buyer, in whole or in part, in any bankruptcy, insolvency, or similar
      proceeding instituted by or against Guarantor of any Obligation, or
      otherwise, including but not limited to all principal, interest, fees,
      expenses and other charges.

 

 

	 	
      (b)
	
      For
      purposes of this Guaranty, “Person”
      means any individual, corporation, partnership, limited partnership,
      limited liability company, joint venture, firm, association, trust,
      unincorporated organization, government or governmental agency or
      political subdivision or any other entity, whether acting in an
      individual, fiduciary or other capacity.

 

	
      2.
	
      Guaranty.
      Guarantor hereby absolutely and unconditionally guarantees to Buyer the
      payment or performance of the Obligations when due (Buyer may demand
      payment or performance of any or all of the other Obligations, when such
      payment or performance is due or required and Guarantor shall immediately
      pay or perform the same, whether or not Buyer has (a) accelerated payment
      of the Obligations, or (b) commenced repossession of, or foreclosure of
      any security interest, mortgage or other lien in, any or all of the
      collateral securing the Obligations, or (c) otherwise exercised its rights
      and remedies hereunder or under the Obligations, the documents related
      thereto or applicable law) and Guarantor shall immediately pay the same to
      Buyer.

 

	
      3.
	
      Continuing
      Guaranty.
      This Guaranty is an absolute, unconditional and continuing guaranty of
      payment and performance of the Obligations and the Obligations of
      Guarantor hereunder shall not be released, in whole or in part, by any
      action or thing which might, but for this provision of this Guaranty, be
      deemed a legal or equitable discharge of a surety or any Guarantor, other
      than irrevocable payment and performance in full of the Obligations. No
      notice of the Obligations to which this Guaranty may apply, or of any
      renewal or extension thereof, need be given to Guarantor, and none of the
      foregoing acts shall release Guarantor from liability hereunder. Guarantor
      hereby expressly waives the following: (a) demand of payment, presentment,
      protest, notice of dishonor, nonpayment or nonperformance on any and all
      forms of the Obligations; (b) notice of acceptance of this Guaranty and
      notice of any liability to which it may apply; (c) all other notices and
      demands of any kind and description relating to the Obligations now or
      hereafter provided for by any agreement, statute, law, rule or regulation;
      and (d) any and all defenses of the Company pertaining to the Obligations
      except for the defense of discharge by payment. Guarantor shall not be
      exonerated with respect to Guarantor’ liabilities under this Guaranty by
      any act or thing except irrevocable payment and performance of the
      Obligations, it being the purpose and intent of this Guaranty that the
      Obligations constitute the direct and primary obligations of each
      Guarantor and that the covenants, agreements and all obligations of such
      Guarantor hereunder be absolute, unconditional and irrevocable. Guarantor
      shall be and remain liable for any deficiency remaining after foreclosure
      of any mortgage, deed of trust or security agreement securing all or any
      part of the Obligations, whether or not the liability of the Company or
      any other Person for such deficiency is discharged pursuant to statute,
      judicial decision or otherwise. The acceptance of this Guaranty by Buyer
      is not intended and does not release any liability previously existing of
      any guarantor or surety of any indebtedness of the Company to
      Buyer.

 

	
      4.
	
      Other
      Transactions.
      Buyer is expressly authorized (a) to exchange, surrender or release with
      or without consideration any or all collateral and security which may at
      any time be placed with it by the Company or by any other Person, or to
      forward or deliver any or all such collateral and security directly to the
      Company for collection and remittance or for credit, or to collect the
      same in any other manner without notice to Guarantor, and (b) to amend,
      modify, extend or supplement the Note or the Security Agreement and any
      other agreement with respect to the Obligations in accordance with their
      terms, waive compliance by the Company or any other Person with the
      respective terms thereof and settle or compromise any of the Obligations
      without notice to Guarantor and without in any manner affecting the
      absolute liabilities of each Guarantor hereunder. No invalidity,
      irregularity or unenforceability of all or any part of the Obligations or
      of any security therefor or other recourse with respect thereto shall
      affect, impair or be a defense to this Guaranty. The liabilities of each
      Guarantor hereunder shall not be affected or impaired by any failure,
      delay, neglect or omission on the part of Buyer to realize upon any of the
      Obligations of the Company to Buyer, or upon any collateral or security
      for any or all of the Obligations, nor by the taking by Buyer of (or the
      failure to take) any other guaranty or guaranties to secure the
      Obligations, nor by the taking by Buyer of (or the failure to take or the
      failure to perfect its security interest in or other lien on) collateral
      or security of any kind. No act or omission of Buyer, whether or not such
      action or failure to act varies or increases the risk of or affects the
      rights or remedies of Guarantor, shall affect or impair the obligations of
      Guarantor hereunder. Each Guarantor acknowledges that this Guaranty is in
      effect and binding without reference to whether this Guaranty is signed by
      any other Person or Persons, that possession of this Guaranty by Buyer
      shall be conclusive evidence of due delivery hereof by Guarantor and that
      this Guaranty shall continue in full force and effect, both as to the
      Obligations then existing and/or thereafter created, notwithstanding the
      release of or extension of time to any other Guarantor of the Obligations
      or any part thereof.

 

2

 

	
      5.
	
      Actions
      Not Required.
      Guarantor hereby severally waives any and all right to cause a marshalling
      of the assets of the Company or any other action by any court or other
      governmental body with respect thereto or to cause Buyer to proceed
      against any security for the Obligations or any other recourse which Buyer
      may have with respect thereto and further waives any and all requirements
      that Buyer institute any action or proceeding at law or in equity, or
      obtain any judgment, against the Company or any other Person, or with
      respect to any collateral security for the Obligations, as a condition
      precedent to making demand on or bringing an action or obtaining and/or
      enforcing a judgment against Guarantor upon this Guaranty. Guarantor
      further acknowledges that time is of the essence with respect to
      Guarantor’s obligations under this Guaranty. Any remedy or right hereby
      granted which shall be found to be unenforceable as to any Person or under
      any circumstance, for any reason, shall in no way limit or prevent the
      enforcement of such remedy right as to any other Person or circumstance,
      nor shall such unenforceability limit or prevent enforcement of any other
      remedy or right hereby granted.

 

	
      6.
	
      No
      Subrogation.
      Notwithstanding any payment or payments made by Guarantor hereunder or any
      setoff or application of funds of Guarantor by Buyer, Guarantor waives all
      rights of subrogation to any of the rights of Buyer against the Company or
      any other Person liable for payment of any of the Obligations or any
      collateral security or guaranty or right of offset held by Buyer for the
      payment of the Obligations, and Guarantor waives all rights to seek any
      recourse to or contribution or reimbursement from the Company or any other
      Person liable for payment of any of the Obligations in respect of payments
      made by Guarantor hereunder. Notwithstanding any of the foregoing, to the
      extent (a) any right of subrogation which Guarantor may have pursuant to
      this Guaranty or otherwise, or (b) any right of reimbursement or
      contribution or similar right against the Company, any property of the
      Company or any other guarantor of any of the Obligations would result in
      any Guarantor being “creditors” of or the holders of a “claim” against the
      Company within the meaning of Title 11 of the United States
      Bankruptcy Code as now in effect or hereafter amended, or any comparable
      provision of any successor statute, the Guarantor hereby irrevocably
      waives such right of subrogation, reimbursement or
      contribution.

 

3

 

	
      7.
	
      Application
      of Payments.
      Any and all payments upon the Obligations made by Guarantor or by any
      other Person, and/or the proceeds of any or all collateral or security for
      any of the Obligations, may be applied by Buyer on such items of the
      Obligations as Buyer may elect.

 

	
      8.
	
      Recovery
      of Payment.
      If any payment received by Buyer and applied to the Obligations is
      subsequently set aside, recovered, rescinded or required to be returned
      for any reason (including, without limitation, the bankruptcy, insolvency
      or reorganization of the Company or any other obligor), the Obligations to
      which such payment was applied shall for the purposes of this Guaranty be
      deemed to have continued in existence, notwithstanding such application,
      and this Guaranty shall be enforceable as to such Obligations as fully as
      if such application had never been made. References in this Guaranty to
      amounts “irrevocably paid” or to “irrevocable payment” refer to payments
      that cannot be set aside, recovered, rescinded or required to be returned
      for any reason.

 

	
      9.
	
      The
      Company’s Financial Condition.
      Guarantor is familiar with the financial condition of the Company, and the
      Guarantor has executed and delivered this Guaranty based on such
      Guarantor’s own judgment and not in reliance upon any statement or
      representation of Buyer. Buyer shall not have any obligation to provide
      Guarantor with any advice whatsoever or to inform Guarantor at any time of
      Buyer’s actions, evaluations or conclusions on the financial condition or
      any other matter concerning the Company.

 

	
      10.
	
      Remedies.
      All remedies afforded to Buyer by reason of this Guaranty are separate and
      cumulative remedies and it is agreed that no one of such remedies, whether
      or not exercised by Buyer, shall be deemed to be in exclusion of any of
      the other remedies available to Buyer and no one of such remedies shall in
      any way limit or prejudice any other legal or equitable remedy which Buyer
      may have hereunder and with respect to the Obligations. Mere delay or
      failure to act shall not preclude the exercise or enforcement of any
      rights and remedies available to Buyer.

 

	
      11.
	
      Bankruptcy
      of the Company.
      Guarantor expressly agree that the liabilities and obligations of
      Guarantor under this Guaranty shall not in any way be impaired or
      otherwise affected by the institution by or against the Company or any
      other Person of any bankruptcy, reorganization, arrangement, insolvency or
      liquidation proceedings, or any other similar proceedings for relief under
      any bankruptcy law or similar law for the relief of debtors and that any
      discharge of any of the Obligations pursuant to any such bankruptcy or
      similar law or other law shall not diminish, discharge or otherwise affect
      in any way the obligations of Guarantor under this Guaranty, and that upon
      the institution of any of the above actions, such obligations shall be
      enforceable against Guarantor.

 

4

 

	
      12.
	
      Costs
      and Expenses.
      Guarantor will pay or reimburse Buyer on demand for all out-of-pocket
      expenses (including in each case all reasonable fees and expenses of
      Guarantor) incurred by Buyer arising out of or in connection with the
      enforcement of this Guaranty against Guarantor or arising out of or in
      connection with any failure of Guarantor to fully and timely perform the
      obligations of Guarantor hereunder.

 

	
      13.,
	
      Waivers
      and Amendments.
      This Guaranty can be waived, modified, amended, terminated or discharged
      only explicitly in a writing signed by Buyer. A waiver so signed shall be
      effective only in the specific instance and for the specific purpose
      given.

 

	
      14.
	
      Notices.
      Any notice or other communication to any party in connection with this
      Guaranty shall be in writing and shall be sent by manual delivery,
      telegram, telex, facsimile transmission, overnight courier or express,
      certified or registered United States mail (postage prepaid) addressed to
      such party at the address specified on the signature page hereof, or at
      such other address as such party shall have specified to the other party
      hereto in writing. All periods of notice shall be measured from the date
      of delivery thereof if manually delivered, from the date of sending
      thereof if sent by telegram, telex or facsimile transmission, from the
      first business day after the date of sending if sent by overnight courier,
      or from four days after the date of mailing if
mailed.

 

	
      15.
	
      Representations
      and Warranties.
      Guarantor hereby represents and warrants to Buyer that it is a corporation
      duly organized, validly existing and in good standing under the laws of
      the Province of Ontario and has the power and authority and the legal
      right to own and operate its properties and to conduct the business in
      which it is currently engaged. ACI hereby represents and warrants to Buyer
      that it is a corporation duly organized, validly existing and in good
      standing under the laws of the State of Florida and has the power and
      authority and the legal right to own and operate its properties and to
      conduct the business in which it is currently engaged. The Company hereby
      represents and warrants to Buyer that it is a corporation organized,
      validly existing and in good standing under the laws of the State of
      Delaware and has the power and authority and the legal right to own and
      operate its properties and to conduct the business in which it is
      currently engaged. Each Guarantor further represents and warrants
      severally to Buyer that:

 

	 	
      (a)
	
      It
      has the power and authority and the legal right to execute and deliver,
      and to perform its obligations under, this Guaranty and has taken all
      necessary action required by its form of organization to authorize such
      execution, delivery and performance.

 

	 	
      (b)
	
      This
      Guaranty constitutes its legal, valid and binding obligation enforceable
      in accordance with its terms, except as enforceability may be limited by
      applicable bankruptcy, insolvency, reorganization, moratorium or similar
      laws affecting the enforcement of creditors’ rights generally and by
      general equitable principles (whether enforcement is sought by proceedings
      in equity or at law).

 

	 	
      (c)
	
      The
      execution, delivery and performance of this Guaranty will not (i) violate
      any provision of any law, statute, rule or regulation or any order, writ,
      judgment, injunction, decree, determination or award of any court,
      governmental agency or arbitrator presently in effect having applicability
      to it, (ii) violate or contravene any provision of its organizational
      documents, or (iii) result in a breach of or constitute a default under
      any indenture, loan or credit agreement or any other agreement, lease or
      instrument to which it is a party or by which it or any of its properties
      may be bound or result in the creation of any lien thereunder. It is not
      in default under or in violation of any such law, statute, rule or
      regulation, order, writ, judgment, injunction, decree, determination or
      award or any such indenture, loan or credit agreement or other agreement,
      lease or instrument in any case in which the consequences of such default
      or violation could have a material adverse effect on its business,
      operations, properties, assets or condition (financial or
      otherwise).

 

5

 

	 	
      (d)
	
      No
      order, consent, approval, license, authorization or validation of, or
      filing, recording or registration with, or exemption by, any governmental
      or public body or authority is required on its part to authorize, or is
      required in connection with the execution, delivery and performance of, or
      the legality, validity, binding effect or enforceability of, this
      Guaranty.

 

	 	
      (e)
	
      There
      are no actions, suits or proceedings pending or, to its knowledge,
      threatened against or affecting it or any of its properties before any
      court or arbitrator, or any governmental department, board, agency or
      other instrumentality which, if determined adversely to it, would have a
      material adverse effect on its business, operations, property or condition
      (financial or otherwise) or on its ability to perform its obligations
      hereunder.

 

	 	
      (f)
	
      It
      expects to derive benefits from the transactions resulting in the creation
      of the Obligations. Buyer may rely conclusively on the continuing
      warranty, hereby made, that Guarantor continues to be benefited by the
      loan evidenced by the Note and Buyer shall have no duty to inquire into or
      confirm the receipt of any such benefits, and this Guaranty shall be
      effective and enforceable by Buyer without regard to the receipt, nature
      or value of any such benefits.

 

	
      16.
	
      Continuing
      Guaranty.
      Except as explicitly stated in this Section 16, this Guaranty shall (a)
      remain in full force and effect until irrevocable payment in full of the
      Obligations, (b) be binding upon the Guarantor and its respective
      successors, and (c) inure to the benefit of, and be enforceable by, Buyer
      and its respective successors, transferees, and assigns. 

 

	
      17.
	
      Reaffirmation.
      The Guarantor agrees that when so requested by Buyer from time to time it
      will promptly execute and deliver to Buyer a written reaffirmation of this
      Guaranty in such form as Buyer may require.

 

	
      18.
	
      Governing
      Law and Construction.
      THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS GUARANTY SHALL BE
      GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS, WITHOUT GIVING EFFECT TO
      CONFLICT OF LAWS PRINCIPLES THEREOF. Whenever
      possible, each provision of this Guaranty and any other statement,
      instrument or transaction contemplated hereby or relating hereto shall be
      interpreted in such manner as to be effective and valid under such
      applicable law, but, if any provision of this Guaranty or any other
      statement, instrument or transaction contemplated hereby or relating
      hereto shall be held to be prohibited or invalid under such applicable
      law, such provision shall be ineffective only to the extent of such
      prohibition or invalidity, without invalidating the remainder of such
      provision or the remaining provisions of this Guaranty or any other
      statement, instrument or transaction contemplated hereby or relating
      hereto.

 

6

 

	
      19.
	
      General.
      All representations and warranties contained in this Guaranty or in any
      other agreement between Guarantor and Buyer shall survive the execution,
      delivery and performance of this Guaranty and the creation and payment of
      the Obligations. Captions in this Guaranty are for reference and
      convenience only and shall not affect the interpretation or meaning of any
      provision of this Guaranty.

 

	
      20.
	
      Intercreditor
      Agreement.
      Guarantor
      hereby agrees to absolutely subordinate any and all amounts due to it by
      ACI and the Company to the Note due to the Secured Party and shall sign an
      Intercreditor Agreement and Subordination Agreement to that effect within
      ten (10) days of the Execution Date.

 

Guarantor
has executed this Guaranty as of the Execution Date, as that term is used and
defined in the Purchase Agreement. 

 

	 	 	 
	 	GUARANTOR:
	 	 
	 	COUNSEL
      CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
      

      Name:
	 	Title:

 

[Signature
Page to Guaranty]

 

7Exhibit 10.1

May 17, 2005

Paul Deeley
5 Peggy Drive
Southborough, MA 01772

Dear Paul,

On behalf of NMS Communications, we are pleased to offer you a position as Vice
President and Corporate Controller reporting to D'Anne Hurd located in our
Framingham office. Your base compensation will be paid at the gross rate of
$6,730.77 per pay period which on an annual basis is $175,000.

Additionally, you are eligible to participate in the Management bonus program
for the year 2005 at 40% of your pro-rated annual base salary. The details of
the bonus program will be discussed between you and your manager.

In addition to the above compensation, you will be entitled to participate in
the Company Stock Option Program at the level of 25,000 shares priced at the
close of market on your start date. Authorization and issuance of this stock
remains the prerogative of the Board of Directors. As a full-time employee you
will be eligible to participate in the complete NMS Communications benefit
package. A copy of the NMS Benefits Summary is enclosed with this letter. In
addition, information on our severance and change in control policies are
enclosed.

This offer of employment is contingent upon your agreement to our standard
Employee Non-Compete and Confidentiality Agreement, a copy of which is enclosed
with this letter. Please indicate your acceptance to both the employment offer
and the Employee Non-Compete and Confidentiality Agreement by signing in the
indicated space on the enclosed copies, returning one copy to Human Resources
and retaining one copy for your files.

The Immigration Reform and Control Act requires employers to verify the
employment eligibility and identity of new employees. You will need to complete
the top section of the enclosed Form I-9 and bring it, together with the
appropriate documents listed under Part 2, with you when you report for work. We
will not be able to employ you if you fail to comply with this requirement.

Please make your written response of acceptance to this offer of employment by
signing and dating this letter and returning it to Human Resources by close of
business May 19, 2005. Please use the fax no. 508-271-1148. Our entire team
warmly anticipates the strong contribution you can make to NMS Communications
and welcomes your participation in building a large and successful company. If
you have any questions, please call me at (508) 271-1392. Welcome to NMS
Communications!

Most Sincerely,

Tina Robidoux
Director, Human Resources

Accepted: Paul J. Deeley, Jr.                        Date: May 19, 2005

Start Date: Week of June 20th 2005

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