Form of Validity Guaranty

 

 

VALIDITY GUARANTY (this “Agreement”) is made as of the 21^st day of December, 2007, by and among COMVEST CAPITAL, LLC, a Delaware limited liability company having offices at One North Clematis, Suite 300, West Palm Beach, Florida 33401 (the “Lender”), AFTERSOFT GROUP, INC., a Delaware corporation having offices at Regus House, Heronsway Chester Business Park, Chester, CH4 9QR United Kingdom (the “Borrower”), and _____________, an individual residing at _____________________________ (the “Principal”);

 

W I T N E S S E T H 

 

WHEREAS, the Principal is a principal executive officer of the Borrower and its Subsidiaries and has extensive familiarity with and primary responsibility for the management of the Borrower’s and its Subsidiaries’ businesses; and

 

WHEREAS, the Borrower and the Lender are parties to a Revolving Credit and Term Loan Agreement of even date herewith (as amended, modified, supplemented and/or restated from time to time, the “Loan Agreement”); and capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in the Loan Agreement; and

 

WHEREAS, under the Loan Agreement, the Borrower will have the right to borrow certain Advances and Loans and incur other Obligations, which will be secured by the Collateral as set forth in various Security Documents; and

 

WHEREAS, it is a condition precedent to the making of the Loans that the Principal and the Borrower enter into this Agreement.

 

NOW, THEREFORE, in consideration of the premises, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the Lender, the Principal and the Borrower hereby agree as follows:

 

1. Recitals. The parties hereto hereby acknowledge and agree that, to the best of their knowledge, the foregoing recitals are true and accurate in each and every respect.

 

2. Assurances By Principal.

 

(a) The Principal hereby covenants and agrees for the benefit of the Lender that (i) the Principal will not intentionally or through conduct constituting gross negligence, and (ii) the Borrower will not through intentional acts of the Principal or through conduct constituting gross negligence by the Principal: (A) provide or cause to be provided to the Lender information material to the Obligations and/or the Collateral that is inaccurate or misleading in any material respect, (B) conceal or cause to be concealed from the Lender any information material to the Obligations and/or the Collateral, or (C) make any representation or warranty in connection with the Loans or the Collateral that is false or misleading when made (or, if applicable, when reaffirmed under the Loan Agreement) in any material respect, or (D) fail or refuse to turn over any Collateral or proceeds thereof to the Lender as and when required by any Loan Document or otherwise take any action that constitutes fraud or conversion in respect of the Obligations and/or the Collateral.

 

 

(b) If there occurs a breach or violation of any of the obligations of the Principal in Section 2(a) above, the Principal shall unconditionally, without set-off or deduction, indemnify, defend and hold the Lender harmless from any and all loss or damage (including, without limitation, reasonable attorneys’ fees and other reasonable expenses and costs) to the extent resulting from such breach or violation; provided, however, that the Principal’s aggregate liability hereunder shall not exceed the sum of $1,000,000 plus any and all attorneys’ fees and expenses payable by the Principal in accordance with Section 3(a) below. The Lender’s books and records shall be prima facie evidence of the amount of any such loss or damage and any related expenses or costs.

 

3. Default; Waiver; Etc.

 

(a) The Borrower agrees to pay all of the Lender’s reasonable attorneys’ fees and expenses relating to a default by the Principal or the Borrower under this Agreement. The Principal agrees to pay all of the Lender’s reasonable attorneys’ fees and expenses relating to a default by the Principal under this Agreement.

 

(b) Neither the Lender’s entering into this Agreement, nor any failure or delay on the part of the Lender in exercising any right, power, or privilege under this Agreement or any other Loan Document shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any other right, power or privilege. The Lender’s acceptance of this Agreement shall in no way be deemed to obligate the Lender to make any Loans. This Agreement is intended solely for the benefit of the Lender, its successors and assigns, to be used in the exercise of its absolute discretion from time to time, and shall not be interpreted to place on it directly or indirectly any obligation or duty whatsoever to enforce the obligations of the Principal or the Borrower hereunder.

 

4. Termination. This Agreement shall terminate upon the payment in full of the Obligations and the termination or expiration of the Revolving Credit Commitment.

 

5. Entire Agreement. The Principal, the Borrower and the Lender acknowledge that this written agreement and the other Loan Documents represent the final agreement between the parties with respect to the specific subject matter hereof, and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties.

 

6. Waivers. No waiver or amendment shall be deemed to be made by the Lender of any of its rights hereunder, unless the same shall be in writing and signed by the Lender, and each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the Lender or the obligations of the Borrower or the Principal in any other respect at any other time.

 

 

7. Notices. Any and all notices hereunder shall be in writing and addressed to the party to be notified at its address first set forth above, or such other address as such party may designate for itself by notice. Notice shall be deemed to have been duly given (a) when delivered personally or otherwise actually received, (b) three (3) Business Days after being sent by overnight delivery service, with all charges prepaid or billed to the account of the sender, or (c) when sent by facsimile with facsimile confirmation of receipt if receipt is during normal business hours at the point of receipt (or otherwise on the next succeeding Business Day).

 

8. CONSENT TO JURISDICTION; WAIVERS. EACH PARTY HEREBY AGREES, IN RESPECT OF ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, TO THE NON-EXCLUSIVE JURISDICTION OF ANY AND ALL LOCAL, STATE AND/OR FEDERAL COURTS SITTING IN THE STATE OF NEW YORK, AND WAIVES ANY OBJECTION WHICH SUCH PARTY MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT. EACH PARTY HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, TRIAL BY JURY, AND WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF THE LENDER.

 

9. Governing Law. This Agreement shall (irrespective of the place where it is executed and delivered) be governed, construed and controlled by and under the laws of the State of New York (without giving effect to principles of conflicts of laws).

 

10. Binding Effect. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective heirs, executors, administrators, personal representatives, successors and assigns; provided, that neither the Borrower nor the Principal may assign any of their respective obligations hereunder without the Lender’s prior written consent.

 

11. Captions. The Section titles utilized in this Agreement are for convenience only, and shall not affect the construction or interpretation of this Agreement or any of the provisions hereof.

 

12. Counterparts. This Agreement may be executed in any number of counterparts and by fax signatures, each of which shall be deemed to constitute an original, but all of which together shall constitute one and the same binding agreement.

 

13. Severability. In the event and to the extent that any provision of this Agreement shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of any other provisions of this Agreement, all of which shall remain fully enforceable as set forth herein.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.