Document:

ex10-5.htm

Exhibit 10.5

 

GUARANTY

 

GUARANTY, dated as of July 2, 2010 made by each of the undersigned (each a "Guarantor", and collectively, the "Guarantors"), in favor of the "Buyers" (as defined below) party to the Securities Purchase Agreement, dated as of June 30, 2010 (as amended, restated or otherwise modified from time to time, the "Securities Purchase Agreement") and HCP-TELA, LLC, a Delaware limited liability company, in its capacity as collateral agent for the Buyers (in such capacity, the “Collateral Agent”).

 

W I T N E S S E T H :

 

WHEREAS, Telanetix Inc., a Delaware corporation (the "Company"), and each party listed as a "Buyer" on the Schedule of Buyers attached to the Securities Purchase Agreement (each a "Buyer", and collectively, the "Buyers") are parties to the Securities Purchase Agreement;

 

WHEREAS, the Securities Purchase Agreement requires that the Guarantors execute and deliver, (i) this guaranty guaranteeing all of the obligations of the Company under the Securities Purchase Agreement, the Notes (as defined below) and the other "Transaction Documents" (as defined in the Securities Purchase Agreement, the "Transaction Documents"); and (ii) a Pledge and Security Agreement dated the date hereof, for the benefit of the Collateral Agent, granting the Collateral Agent on behalf of the Buyers, a lien in all of the Guarantors' personal property (the "Security Agreement"); and

 

WHEREAS, each Guarantor has determined that the execution, delivery and performance of this Guaranty directly benefits, and is in the best interest of, such Guarantor;

 

NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement, each Guarantor hereby agrees with each Buyer as follows:

 

SECTION 1. Definitions.  Reference is hereby made to the Securities Purchase Agreement and the "Notes" (as defined) in and issued pursuant to the Securities Purchase Agreement and (as such Notes may be amended, restated, replaced or otherwise modified from time to time in accordance with the terms thereof, collectively, the "Notes") for a statement of the terms thereof.  All terms used in this Guaranty, which are defined in the Securities Purchase Agreement or the Notes and not otherwise defined herein, shall have the same meanings herein as set forth therein.

 

SECTION 2. Guaranty.  The Guarantors, jointly and severally, hereby unconditionally and irrevocably, guaranty the punctual payment, as and when due and payable, by stated maturity or otherwise, of all Obligations (as defined in the Security Agreement) of the Company from time to time owing by it in respect of the Securities Purchase Agreement, the Notes and the other Transaction Documents, including, without limitation, all interest that accrues after the commencement of any Insolvency Proceeding (as defined in the Security Agreement) of the Company or any Guarantor, whether or not the payment of such interest is unenforceable or is not allowable due to the existence of such Insolvency Proceeding, and all fees, commissions, expense reimbursements, indemnifications and all other amounts due or to become due under any of the Transaction Documents (such obligations, to the extent not paid by the Company, being the "Guaranteed Obligations"), and agrees to pay any and all expenses (including reasonable counsel fees and expenses) reasonably incurred by the Collateral Agent or any Buyer in enforcing any rights under this Guaranty.  Without limiting the generality of the foregoing, each Guarantor's liability hereunder shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by the Company to the Collateral Agent or any Buyer under the Securities Purchase Agreement and the Notes but for the fact that they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving any Guarantor or the Company (each, a "Transaction Party").

 

  

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SECTION 3. Guaranty Absolute; Continuing Guaranty; Assignments.

 

(a) The Guarantors, jointly and severally, guaranty that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Transaction Documents, 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 Collateral Agent or any Buyer with respect thereto.  The obligations of each Guarantor under this Guaranty are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against any Guarantor to enforce such obligations, irrespective of whether any action is brought against any Transaction Party or whether any Transaction Party is joined in any such action or actions.  The liability of any Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives, to the extent permitted by law, any defenses it may now or hereafter have in any way relating to, any or all of the following:

 

(i) any lack of validity or enforceability of any Transaction Document or any agreement or instrument relating thereto;

 

(ii) 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 any Transaction Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Transaction Party or otherwise;

 

(iii) any taking, exchange, release or non-perfection of any Collateral (as defined in the Security Agreement), 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;

 

(iv) any change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any Transaction Party; or

 

(v) any other circumstance (including any statute of limitations) or any existence of or reliance on any representation by the Collateral Agent that might otherwise constitute a defense available to, or a discharge of, any Transaction Party or any other guarantor or surety, other than, subject to the following sentence, the actual payment in full of the Guaranteed Obligations and/or complete conversion of the Obligations to equity securities of the Company.

 

  

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This Guaranty 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 the Collateral Agent or any other Person upon the insolvency, bankruptcy or reorganization of any Transaction Party or otherwise, all as though such payment had not been made.

 

(b) This Guaranty is a continuing guaranty and shall (i) remain in full force and effect until the indefeasible cash payment in full of the Guaranteed Obligations  (other than inchoate indemnity obligations) and/or complete conversion of all of the Company's obligations under the Notes to equity securities of the Company and payment of all other amounts payable under this Guaranty (other than inchoate indemnity obligations) and shall not terminate for any reason prior to the Maturity Date of the Notes (other than payment in full of the Notes) and (ii) be binding upon each Guarantor and its respective successors and assigns.  This Guaranty shall inure to the benefit of and be enforceable by the Collateral Agent and its successors, and permitted pledgees, transferees and assigns.  Without limiting the generality of the foregoing sentence, the Collateral Agent or any Buyer may pledge, assign or otherwise transfer all or any portion of its rights and obligations under and subject to the terms of any Transaction Document to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Collateral Agent or Buyer herein or otherwise, in each case as provided in the Securities Purchase Agreement or such Transaction Document.  Notwithstanding the foregoing and for the avoidance of doubt, this Guaranty will expire and each Guarantor will be released from its obligation hereunder upon the earlier of payment in full and/or complete conversion of the Obligations to equity securities of the Company.

 

SECTION 4. Waivers.  To the extent permitted by applicable law, each Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that the Collateral Agent or any Buyer exhaust any right or take any action against any Transaction Party or any other Person or any Collateral.  Each 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 4 is knowingly made in contemplation of such benefits.  The Guarantors hereby waive any right to revoke this Guaranty, and acknowledge that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.

 

SECTION 5. Subrogation.  No Guarantor may exercise any rights that it may now or hereafter acquire against any Transaction Party or any other guarantor that arise from the existence, payment, performance or enforcement of any Guarantor's obligations under this Guaranty, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the  Collateral Agent or any Buyer against any Transaction Party or any other guarantor or any Collateral, 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 any Transaction Party or any other guarantor, 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 (other than inchoate indemnity obligations) and all other amounts payable under this Guaranty (other than inchoate indemnity obligations) shall have indefeasibly been paid in full in cash or such Guarantor has been released from this Guaranty.  If any amount shall be paid to a Guarantor in violation of the immediately preceding sentence at any time prior to the later of the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty, such amount shall be held in trust for the benefit of the Collateral Agent and the Buyers and shall forthwith be paid to the Collateral Agent and the Buyers to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Transaction Document, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Guaranty thereafter arising.  If (a) any Guarantor shall make payment to the Collateral Agent or any Buyer of all or any part of the Guaranteed Obligations, and (b) all of the Guaranteed Obligations (other than inchoate indemnity obligations) and all other amounts payable under this Guaranty (other than inchoate indemnity obligations) shall indefeasibly be paid in full in cash and/or by complete conversion of all of the Company's obligations under the Notes to equity securities of the Company, the Collateral Agent and each Buyer will, at such Guarantor's request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor.

 

  

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SECTION 6. Representations, Warranties and Covenants.

 

(a) Each Guarantor hereby represents and warrants as of the date first written above as follows:

 

(i) Each Guarantor (A) is a corporation, limited liability company or limited partnership duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization as set forth on the signature pages hereto, (B) has all requisite corporate, limited liability company or limited partnership power and authority to conduct its business as now conducted and as presently contemplated and to execute and deliver this Guaranty and each other Transaction Document to which such Guarantor is a party, and to consummate the transactions contemplated hereby and thereby and (C) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary except where the failure to be so qualified would not result in a Material Adverse Effect.

 

(ii) The execution, delivery and performance by each Guarantor of this Guaranty and each other Transaction Document to which such Guarantor is a party (A) have been duly authorized by all necessary corporate, limited liability company or limited partnership action, (B) do not and will not contravene its charter or by-laws, its limited liability company or operating agreement or its certificate of partnership or partnership agreement, as applicable, or any applicable law or any contractual restriction binding on such Guarantor or its properties do not and will not result in or require the creation of any lien (other than pursuant to any Transaction Document) upon or with respect to any of its properties, and (C) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to it or its operations or any of its properties.

 

  

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(iii) No authorization or approval or other action by, and no notice to or filing with, any governmental authority is required in connection with the due execution, delivery and performance by any Guarantor of this Guaranty or any of the other Transaction Documents to which such Guarantor is a party (other than such authorizations, approvals, actions, notices, or filings, which are expressly provided for in any of the Transaction Documents or which have already been obtained, taken or delivered).

 

(iv) Each of this Guaranty and the other Transaction Documents to which each Guarantor is or will be a party, when delivered, will be, a legal, valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or other similar laws or laws affecting generally the enforcement of creditor's rights and remedies or by other equitable principles (regardless of whether enforcement is sought in equity or at law).

 

(v) Except as set forth in Schedule 3(t) of the Securities Purchase Agreement, there is no pending or, to the best knowledge of any Guarantor, threatened action, suit or proceeding against each Guarantor or to which any of the properties of such Guarantor is subject, before any court or other governmental authority or any arbitrator that (A) if adversely determined, could reasonably be expected to have a Material Adverse Effect or (B) relates to this Guaranty or any of the other Transaction Documents to which the Guarantor is a party or any transaction contemplated hereby or thereby.

 

(vi) Each Guarantor (A) has read and understands the terms and conditions of the Securities Purchase Agreement and the other Transaction Documents, and (B) now has and will continue to have independent means of obtaining information concerning the affairs, financial condition and business of the Company and the other Transaction Parties, and has no need of, or right to obtain from any Buyer, any credit or other information concerning the affairs, financial condition or business of the Company or the other Transaction Parties that may come under the control of any Buyer.

 

(b) Each Guarantor covenants and agrees that until indefeasible full and final payment of the Guaranteed Obligations and/or complete conversion of all of the Company's obligations under the Notes to equity securities of the Company, it will comply with each of the covenants which are applicable to such Guarantor (except to the extent applicable only to a public company) which are set forth in Section 4 of the Securities Purchase Agreement as if such Guarantor were a party thereto.

 

SECTION 7. Right of Set-off.  Upon the occurrence and during the continuance of any Event of Default, the Collateral Agent and any Buyer may, and is hereby authorized to, at any time and from time to time, without notice to the Guarantors (any such notice being expressly waived by each Guarantor) and to the fullest extent permitted by law, set-off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Collateral Agent or any such Buyer to or for the credit or the account of any Guarantor against any and all obligations of the Guarantors now or hereafter existing under this Guaranty or any other Transaction Document, irrespective of whether or not the Collateral Agent or any such Buyer shall have made any demand under this Guaranty or any other Transaction Document and although such obligations may be contingent or unmatured.  The Collateral Agent and each Buyer agrees to notify the relevant Guarantor promptly after any such set-off and application made by the Collateral Agent or such Buyer, provided that the failure to give such notice shall not affect the validity of such set-off and application.  The rights of the Collateral Agent and each Buyer under this Section 7 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Collateral Agent or such Buyer may have under this Guaranty or any other Transaction Document in law or otherwise.

 

  

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SECTION 8. Notices, Etc.  All notices and other communications provided for hereunder shall be in writing and shall be mailed, telecopied or delivered, if to any Guarantor, to it at its address set forth on the signature page hereto, or if to the Collateral Agent or any Buyer, to it at its respective address set forth in the Securities Purchase Agreement; or as to any Person at such other address as shall be designated by such Person in a written notice to such other Person complying as to delivery with the terms of this Section 8.  All such notices and other communications shall be effective (i) if mailed (by certified mail, postage prepaid and return receipt requested), when received or three Business Days after deposited in the mails, whichever occurs first; (ii) if telecopied, when transmitted and confirmation is received, provided same is on a Business Day and, if not, on the next Business Day; or (iii) if delivered by hand, upon delivery, provided same is on a Business Day and, if not, on the next Business Day.

 

SECTION 9. CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE.  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER TRANSACTION DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  EACH GUARANTOR HEREBY IRREVOCABLY APPOINTS THE SECRETARY OF STATE OF THE STATE OF NEW YORK AS ITS AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING AND FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT ITS ADDRESS FOR NOTICES AS SET FORTH ON THE SIGNATURE PAGE HERETO AND TO THE SECRETARY OF STATE OF THE STATE OF NEW YORK, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT OR ANY BUYER TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH GUARANTOR IN ANY OTHER JURISDICTION.  ANY GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  TO THE EXTENT THAT ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER TRANSACTION DOCUMENTS.

 

  

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SECTION 10. WAIVER OF JURY TRIAL, ETC.  EACH GUARANTOR HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS GUARANTY OR THE OTHER TRANSACTION DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS GUARANTY OR THE OTHER TRANSACTION DOCUMENTS, AND AGREES THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  EACH GUARANTOR CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE COLLATERAL AGENT OR ANY BUYER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE COLLATERAL AGENT OR ANY BUYER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS.  EACH GUARANTOR HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE COLLATERAL AGENT ENTERING INTO THIS AGREEMENT.

 

SECTION 11. Taxes.

 

(a) All payments made by any Guarantor hereunder or under any other Transaction Document shall be made in accordance with the terms of the respective Transaction Document and shall be made without set-off, counterclaim, deduction or other defense.  All such payments shall be made free and clear of and without deduction for any present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding taxes imposed on the net income of the Collateral Agent or any Buyer by the jurisdiction in which the Collateral Agent or such Buyer is organized or where it has its principal lending office (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and liabilities, collectively or individually, "Taxes").  If any Guarantor shall be required to deduct or to withhold any Taxes from or in respect of any amount payable hereunder or under any other Transaction Document:

 

(i) the amount so payable shall be increased to the extent necessary so that after making all required deductions and withholdings (including Taxes on amounts payable to the Collateral Agent or any Buyer pursuant to this sentence) the Collateral Agent and each Buyer receives an amount equal to the sum it would have received had no such deduction or withholding been made,

 

(ii) such Guarantor shall make such deduction or withholding,

 

  

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(iii) such Guarantor shall pay the full amount deducted or withheld to the relevant taxation authority in accordance with applicable law, and

 

(iv) as promptly as possible thereafter, such Guarantor shall send the Collateral Agent or such Buyer an official receipt (or, if an official receipt is not available, such other documentation as shall be satisfactory to the Collateral Agent or such Buyer, as the case may be) showing payment.  In addition, each Guarantor agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise with respect to, this Agreement or any other Transaction Document (collectively, "Other Taxes").

 

(b) Each Guarantor hereby indemnifies and agrees to hold the Collateral Agent and each Buyer (each an "Indemnified Party") harmless from and against Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 11) paid by any Indemnified Party  as a result of any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise with respect to, this Agreement or any other Transaction Document, and any liability (including penalties, interest and expenses for nonpayment, late payment or otherwise) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted.  This indemnification shall be paid within 30 days from the date on which the Collateral Agent or such Buyer makes written demand therefor, which demand shall identify the nature and amount of such Taxes or Other Taxes.

 

(c) If any Guarantor fails to perform any of its obligations under this Section 11, such Guarantor shall indemnify the Collateral Agent and each Buyer for any taxes, interest or penalties that may become payable as a result of any such failure.  The obligations of the Guarantors under this Section 11 shall survive the termination of this Guaranty and the payment of the Obligations and all other amounts payable hereunder.

 

SECTION 12. Miscellaneous.

 

(a) Each Guarantor will make each payment hereunder in lawful money of the United States of America and in immediately available funds to the Collateral Agent and each Buyer, at such address specified by such Person from time to time by notice to the Guarantors.

 

(b) No amendment or waiver of any provision of this Guaranty and no consent to any departure by any Guarantor therefrom shall in any event be effective unless the same shall be in writing and signed by each Guarantor and the Collateral Agent, acting with the consent of the holders of at least a majority of the (i) then aggregate number of Registrable Securities issued and issuable hereunder and that are then held by the Buyers and (ii) the principal amount of the Notes then outstanding, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

(c) No failure on the part of the Collateral Agent or any Buyer to exercise, and no delay in exercising, any right hereunder or under any other Transaction Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder or under any Transaction Document preclude any other or further exercise thereof or the exercise of any other right.  The rights and remedies of the Collateral Agent and the Buyers provided herein and in the other Transaction Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law.  The rights of the Collateral Agent and the Buyers under any Transaction Document against any party thereto are not conditional or contingent on any attempt by the Collateral Agent or any Buyer to exercise any of their respective rights under any other Transaction Document against such party or against any other Person.

 

  

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(d) Any provision of this Guaranty that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

 

(e) This Guaranty shall (i) be binding on each Guarantor and its respective successors and assigns, and (ii) inure, together with all rights and remedies of the Collateral Agent and each Buyer hereunder, to the benefit of the Collateral Agent, the Buyers and their respective successors, transferees and assigns.  Without limiting the generality of clause (ii) of the immediately preceding sentence, the Collateral Agent and any Buyer may assign or otherwise transfer its rights and obligations under the Securities Purchase Agreement or any other Transaction Document to any other Person in accordance with the terms thereof, and such other Person shall thereupon become vested with all of the benefits in respect thereof granted to the Collateral Agent or such Buyer, as the case may be, herein or otherwise.  None of the rights or obligations of any Guarantor hereunder may be assigned or otherwise transferred without the prior written consent of the Collateral Agent and each Buyer.

 

(f) This Guaranty reflects the entire understanding of the transaction contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, entered into before the date hereof.

 

(g) Section headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

 

(H) THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.

 

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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed by its respective duly authorized officer, as of the date first above written.

 

	 	
TELANETIX, INC., a California corporation

 

By:       /s/ Douglas N. Johnson

    Name: Douglas N. Johnson

    Title:   Chief Executive Officer

 

Address:

    11201 SE 8th Street, Suite 200

    Bellevue, Washington 98004

    Attention: Douglas N. Johnson

    Fax: (425) 646-9078

 

	 	
ACCESSLINE HOLDINGS, INC., a Delaware corporation

 

By:       /s/ Douglas N. Johnson

    Name: Douglas N. Johnson

    Title:   Chief Executive Officer

 

Address:

    11201 SE 8th Street, Suite 200

    Bellevue, Washington 98004

    Attention: Douglas N. Johnson

    Fax: (425) 646-9078

 

	 	
ACCESSLINE COMMUNICATIONS CORPORATION, a Delaware corporation

 

By:       /s/ Douglas N. Johnson

    Name: Douglas N. Johnson

    Title:   Chief Executive Officer

 

Address:

    11201 SE 8th Street, Suite 200

    Bellevue, Washington 98004

    Attention: Douglas N. Johnson

    Fax: (425) 646-9078

 

 

  

10ex10-6.htm

Exhibit 10.6

 

STOCK AWARD AGREEMENT

 

THIS STOCK AWARD AGREEMENT (this "Agreement") is entered into as of July 1, 2010, by and between Douglas N. Johnson, an individual ("Employee"), and Telanetix, Inc., a Delaware corporation ("Company"), with respect to the following facts:

 

A.           Employee is currently employed by the Company and is a participant in the Company's senior management incentive plans (the "Plans").

 

B.           Employee has earned a certain amount of incentive compensation under the Plans, the aggregate amount of which is set forth in column (a) of Exhibit A (such aggregate amount being referred to as the "Unpaid Incentive Compensation"), payment of which amount has been deferred as a result of the Company's financial condition.

 

C.           The Company maintains that payment of all of the Unpaid Incentive Compensation in cash at the current time would jeopardize the Company's ability to continue as a going concern and the Company cannot provide assurances as to when, if ever, it will be able to pay all of the Unpaid Incentive Compensation in cash.

 

D.           The Company is concurrently entering into a Securities Purchase Agreement and related transactions with Hale Capital Partners or its affiliates (the "Purchase Agreement").

 

E.           As a condition to the closing under the Purchase Agreement, Hale Capital Partners has required that the Company pay out the Unpaid Incentive Compensation partially in cash and partially in unregistered shares of the Company's common stock, $0.0001 par value per share (the shares of such common stock paid in respect of the Unpaid Incentive Compensation being referred to as the "Shares"), in accordance with the terms of this Agreement.

 

F.           Employee will be benefitted by the consummation of the transactions under the Purchase Agreement, and is willing to receive the Unpaid Incentive Compensation partially in cash and partially in Shares in accordance with the terms of this Agreement.

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements herein contained, and intending to be legally bound, the Company and Employee agree as follows:

 

1. Settlement of Unpaid Incentive Compensation.  Subject to the terms and conditions of this Agreement and effective as of the Closing of the Purchase Agreement, the Company shall pay and satisfy its obligations to Employee in respect of the Unpaid Incentive Compensation, and the Employee agrees to accept payment of the Unpaid Incentive Compensation, as follows:

 

1.1 The Company shall pay the Unpaid Incentive Compensation through delivery of the number of Shares set forth in column (b) of Exhibit A, which number equals the amount of the Unpaid Incentive Compensation divided by $0.03852.  The Company shall cause all of the Shares to be issued to Employee as soon as reasonably practicable following the date of this Agreement.

 

1.2 The Company shall pay, and Employee shall accept, up to 30% of the Unpaid Incentive Compensation in cash, which amount shall be withheld and retained by the Company to satisfy taxes owed by Employee in respect of the Unpaid Incentive Compensation.  The amount of the Unpaid Incentive Compensation being paid in cash (the "Cash Payment") is set forth in column (c) of Exhibit A.

 

  

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2. Full Satisfaction. The Company's issuance of the Shares and the payment of the Cash Payment as provided for in this Agreement shall discharge all of the Company's obligations to Employee with respect to the Unpaid Incentive Compensation.

 

3. Company Representations.  The Company represents and warrants to Employee that:

 

3.1 Organization and Qualification.  The Company is a corporation duly organized and validly existing in good standing under the laws of the jurisdiction in which it is incorporated, and has the requisite corporate power and authorization to own its properties and to carry on its business as now being conducted.  The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect.  As used in this Agreement, "Material Adverse Effect" means any material adverse effect on the business, properties, assets, operations, results of operations, or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole, or on the transactions contemplated hereby, or on the authority or ability of the Company to perform its obligations hereunder.

 

3.2 Authorization; Enforcement; Validity.  The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and to issue the Shares in accordance with the terms hereof.  The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby, including, without limitation, the issuance of the Shares, have been duly authorized by the Company's board of directors, and no filing, consent or other authorization is required by the Company, its board of directors or its stockholders.  This Agreement has been duly executed and delivered by the Company, and constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

 

3.3 Issuance of Securities.  Upon issuance, the Shares will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens and charges with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of common stock of the Company.

 

3.4 No Conflicts.  The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby will not (i) result in a violation of its certificate of incorporation or its bylaws, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, any agreement to which the Company is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree applicable to the Company, except in the case of clause (iii) above, for such violations which would not have a Material Adverse Effect.

 

4. Employee Representations.  Employee represents and warrants to the Company that:

 

4.1 Validity; Enforcement.  This Agreement has been duly executed and delivered by Employee and constitutes the legal, valid and binding obligations of Employee, enforceable against Employee in accordance with its terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

 

  

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4.2 Acknowledgement of Risk.  Employee understands and acknowledges that investment in the Shares involves a high degree of risk. Employee has been advised to carefully consider the risks described in the reports that the Company files with the United States Securities and Exchange Commission (the "SEC"), including the risk factors identified in the Company's Annual Report on Form 10-K for the year ended December 31, 2009 filed with the SEC on March 17, 2010, before making an investment decision. If any of the risks identified in that report occur, or any other risk occurs that may not be known or recognized by the Company at this time, the Company's business, financial condition or results of operations could suffer. In that case, the market price of the Shares could decline, and Employee may lose all or part of his investment in the Shares. Employee (i) understands that his investment in the Shares involves a high degree of risk, (ii) is able to bear such risk and is able to afford a complete loss of such investment, (iii) has sought such accounting, legal and tax advice as he has considered necessary to make an informed investment decision with respect to his acquisition of the Shares and (iv) acknowledges and agrees that the Company does not make and has not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth herein.

 

4.3 Investment Intent. Employee is acquiring the Shares for his own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, and Employee does not presently have any agreement or understanding, directly or indirectly, with any person to distribute any of the Shares; provided, however, that by making the representations herein, Employee does not agree to hold any of the Shares for any minimum or other specific term and reserves the right to dispose of the Shares at any time in accordance with or pursuant to a registration statement or an exemption from the registration requirements of United States federal and state securities laws.

 

4.4 Reliance on Exemptions.  Employee understands that the Shares are being offered and sold to Employee in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and Employee's compliance with, the representations, warranties, agreements, acknowledgments and understandings of Employee set forth herein in order to determine the availability of such exemptions and the eligibility of Employee to acquire the Shares.  At no time was Employee presented with or solicited by or through any leaflet, public promotional meeting, television advertisement or, to its knowledge, any other form of general solicitation or advertising relating to the Shares.

 

4.5 Information.  No prospectus or "offering memorandum" has been delivered to the Employee in connection with the acquisition of the Shares.

 

4.6 No Governmental Review.  Employee understands that no federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares or the fairness or suitability of the investment in the Shares nor have such authorities passed upon or endorsed the merits of the offering of the Shares.

 

4.7 Transfer or Resale.  Employee understands that (i) the Shares have not been and are not being registered under the Securities Act of 1933, as amended (the "1933 Act") or any state securities laws, and the Shares may not be offered for sale, sold, assigned or transferred unless subsequently registered thereunder or in accordance with an exemption from registration, and (ii) neither the Company nor any other person is under any obligation to register the Shares under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

 

  

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4.8 Legends.  Employee understands that the certificates representing the Shares shall bear any legend required by the securities laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

4.9 Restrictions on Transfer for Affiliates.  Employee understands that if Employee is deemed to be an "affiliate" of the Company (as such term is defined in Rule 144 promulgated under the 1933 Act), the Shares, once issued to Employee, will be considered "control securities" (as such term is defined in Rule 144 promulgated under the 1933 Act) and can only be resold pursuant to an effective resale registration statement under the 1933 Act or an exemption from registration, such as the exemption provided by Rule 144.  Rule 144 imposes certain restrictions on the volume of securities that may be sold, and upon the manner of sale of securities.

 

4.10 Section 16 Restrictions.  Employee understands that Employee may have additional restrictions on transfer of the Shares if Employee is subject to Section 16 of the Securities Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, "Section 16"). Persons subject to Section 16 are subject to short swing profits rules and may be compelled to remit to the Company any profits that such person earns on a purchase and sale, or sale and purchase of the Company's securities that occur within a six month period.  EMPLOYEE IS ADVISED TO CONSULT WITH HIS OR HER OWN SECURITIES ADVISOR WITH RESPECT TO THE ACQUISITION OR DISPOSITION OF ANY SECURITIES OF THE COMPANY.

 

5. Taxes.

 

5.1 General.  All taxes imposed or levied by reason of, in connection with or attributable to this Agreement or the transactions contemplated hereby shall be borne by each party as appropriate under applicable laws.  Employee acknowledges that the general tax treatment upon  receipt of the shares of Shares is that the Employee will be deemed to receive ordinary income equal to the fair market value of the Shares at the time of issuance.  This income is subject to wage withholding taxes for employees or former employees.  Employee's tax basis in the Shares is their fair market value at the time of issuance, and any later appreciation in the value of the shares is taxed as capital gains when the shares are sold.  Employee's holding period in the Shares will start at the time of acquisition, and the capital gains or losses recognized will be either long-term or short-term depending on whether the Shares were held for more than one year before sale.  Utilization of losses is subject to special rules and limitations. Federal, state and local income tax consequences depend on Employee's individual circumstances.

 

  

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5.2 Application of Code Section 409A.  None of the transactions contemplated hereby, nor any actions taken by the parties prior to the date of this Agreement, are or were intended to create a "nonqualified deferred compensation plan" within the meaning, and subject to the requirements, of Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury regulations promulgated thereunder (collectively, "409A").  For the avoidance of doubt, any delay in payment of all or a portion of the Unpaid Incentive Compensation was, and continues to be, attributable to the Company's inability to pay such amounts without jeopardizing its ability to continue as a going concern, which provides for the continued availability of the short-term deferral exception under 409A.

 

EMPLOYEE HAS BEEN ADVISED TO CONSULT WITH HIS OR HER OWN TAX ADVISOR AS TO THE TAX CONSEQUENCES OF HIS OR HER PARTICULAR TRANSACTIONS UNDER THIS AGREEMENT AND THE 2009 EQUITY INCENTIVE PLAN.

 

6. Miscellaneous.

 

6.1 Successors and Assigns.  This Agreement may not be assigned or otherwise transferred by either party without the written consent of the other party.  Any purported assignment in violation of the preceding sentence shall be void.  Notwithstanding the foregoing, the Company may assign this Agreement and its rights and benefits hereunder and may delegate its duties hereunder to an affiliate or to any person which acquires all or substantially all of the business of the Company; provided, however, that the Company shall remain primarily liable for its obligations hereunder.

 

6.2 Entire Agreement; Amendment and Waiver.  This Agreement constitutes the full and entire understanding and agreement between the parties and fully supersede any and all prior agreements or understandings between them pertaining to the subject matter hereof.  Any term of this Agreement may be amended by a signed writing entered into by the parties hereto and the observance of any term hereof may be waived only with the written consent of the party against whom the waiver is to be effective.

 

6.3 Severability.  If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties.  The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

 

6.4 Further Assurances.  Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

  

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6.5 Governing Law.  This Agreement will be governed by, and construed in accordance with, the substantive laws of the State of Delaware without reference to the conflicts of laws rules of such state.

 

6.6 Counterparts.  This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original.

 

[SIGNATURE PAGE FOLLOWS]

 

 

  

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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed as of the date first written above:

 

EMPLOYEE:

 

____________________________________

Name:                                                                           

 

 

COMPANY:

Telanetix, Inc. a Delaware corporation

By:  ____________________________________

Name: __________________________________

Title: ___________________________________

 

 

  

  

  

 

EXHIBIT A

 

	
Employee: Douglas N. Johnson

 

	

Aggregate Unpaid

Incentive Compensation

(a)

	

Number of Shares

(b)

	

Cash Payment

(c)

	
 

$139,776

 

	
 

2,540,062

 

	
 

$41,932.80

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