{"id":41337,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/subsidiary-guarantee-of-securities-purchase-agreement-digital.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"subsidiary-guarantee-of-securities-purchase-agreement-digital","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/subsidiary-guarantee-of-securities-purchase-agreement-digital.html","title":{"rendered":"Subsidiary Guarantee of Securities Purchase Agreement – Digital Angel Corp."},"content":{"rendered":"

SUBSIDIARY GUARANTEE<\/strong><\/p>\n

\n<\/p>\n

SUBSIDIARY GUARANTEE, dated as of February 24, 2011 (this
\n“Guarantee<\/u>“), made by each of the signatories hereto (together with any
\nother entity that may become a party hereto as provided herein, the
\n“Guarantors<\/u>“), in favor of the purchasers signatory (together with their
\npermitted assigns, the “Purchasers<\/u>“) to that certain Securities Purchase
\nAgreement, dated as of the date hereof, between Digital Angel Corporation, a
\nDelaware corporation (the “Company<\/u>“) and the Purchasers.<\/p>\n<\/p>\n<\/p>\n

W I T N E S S E T H:<\/strong><\/p>\n

\n<\/p>\n

WHEREAS, pursuant to that certain Securities Purchase Agreement, dated as of
\nthe date hereof, by and between the Company and the Purchasers (the
\n“Purchase Agreement<\/u>“), the Company has agreed to sell and issue to the
\nPurchasers, and the Purchasers have agreed to purchase from the Company the
\nDebentures, subject to the terms and conditions set forth therein; and<\/p>\n<\/p>\n<\/p>\n

WHEREAS, each Guarantor will directly benefit from the extension of credit to
\nthe Company represented by the issuance of the Debentures; and<\/p>\n<\/p>\n<\/p>\n

NOW, THEREFORE, in consideration of the premises and to induce the Purchasers
\nto enter into the Purchase Agreement and to carry out the transactions
\ncontemplated thereby, each Guarantor hereby agrees with the Purchasers as
\nfollows:<\/p>\n<\/p>\n

1. Definitions<\/u>. Unless otherwise defined herein, terms defined in the
\nPurchase Agreement and used herein shall have the meanings given to them in the
\nPurchase Agreement. The words “hereof,” “herein,” “hereto” and “hereunder” and
\nwords of similar import when used in this Guarantee shall refer to this
\nGuarantee as a whole and not to any particular provision of this Guarantee, and
\nSection and Schedule references are to this Guarantee unless otherwise
\nspecified. The meanings given to terms defined herein shall be equally
\napplicable to both the singular and plural forms of such terms. The following
\nterms shall have the following meanings:<\/p>\n<\/p>\n<\/p>\n

“Guarantee<\/u>” means this Subsidiary Guarantee, as the same may be
\namended, supplemented or otherwise modified from time to time.<\/p>\n<\/p>\n

\n

“Obligations<\/u>” means, in addition to all other costs and expenses of
\ncollection incurred by Purchasers in enforcing any of such Obligations and\/or
\nthis Guarantee, all of the liabilities and obligations (primary, secondary,
\ndirect, contingent, sole, joint or several) due or to become due, or that are
\nnow or may be hereafter contracted or acquired, or owing to, of the Company or
\nany Guarantor to the Purchasers, including, without limitation, all obligations
\nunder this Guarantee, the Debentures and any other instruments, agreements or
\nother documents executed and\/or delivered in connection herewith or therewith,
\nin each case, whether now or hereafter existing, voluntary or involuntary,
\ndirect or indirect, absolute or contingent, liquidated or unliquidated, whether
\nor not jointly owed with others, and whether or not from time to time decreased
\nor extinguished and later increased, created or incurred, and all or any portion
\nof such obligations or liabilities that are paid, to the extent all or any part
\nof such payment is avoided or recovered directly or indirectly from any of the
\nPurchasers as a preference, fraudulent transfer or otherwise as such obligations
\nmay be amended, supplemented, converted, extended or modified from time to time.
\nWithout limiting the generality of the foregoing, the term “Obligations” shall
\ninclude, without limitation: (i) principal of, and interest on the Debentures
\nand the loans extended pursuant thereto; (ii) any and all other fees,
\nindemnities, costs, obligations and liabilities of the Company or any Guarantor
\nfrom time to time under or in connection with this Guarantee, the Debentures and
\nany other instruments, agreements or other documents executed and\/or delivered
\nin connection herewith or therewith; and (iii) all amounts (including but not
\nlimited to post-petition interest) in respect of the foregoing that would be
\npayable but for the fact that the obligations to pay such amounts are
\nunenforceable or not allowable due to the existence of a bankruptcy,
\nreorganization or similar proceeding involving the Company or any Guarantor.<\/p>\n<\/p>\n

2. Guarantee<\/u>.<\/p>\n<\/p>\n<\/p>\n

(a) Guarantee<\/u>.<\/p>\n<\/p>\n

(i) The Guarantors hereby, jointly and severally, unconditionally and
\nirrevocably, guarantee to the Purchasers and their respective successors,
\nindorsees, transferees and assigns, the prompt and complete payment and
\nperformance when due (whether at the stated maturity, by acceleration or
\notherwise) of the Obligations.<\/p>\n<\/p>\n

(ii) Anything herein or in any other Transaction Document to the contrary
\nnotwithstanding, the maximum liability of each Guarantor hereunder and under the
\nother Transaction Documents shall in no event exceed the amount which can be
\nguaranteed by such Guarantor under applicable federal and state laws, including
\nlaws relating to the insolvency of debtors, fraudulent conveyance or transfer or
\nlaws affecting the rights of creditors generally (after giving effect to the
\nright of contribution established in Section 2(b)).<\/p>\n<\/p>\n<\/p>\n

(iii) Each Guarantor agrees that the Obligations may at any time and from
\ntime to time exceed the amount of the liability of such Guarantor hereunder
\nwithout impairing the guarantee contained in this Section 2 or affecting the
\nrights and remedies of the Purchasers hereunder.<\/p>\n<\/p>\n<\/p>\n

(iv) The guarantee contained in this Section 2 shall remain in full force and
\neffect until all the Obligations and the obligations of each Guarantor under the
\nguarantee contained in this Section 2 shall have been satisfied by indefeasible
\npayment in full.<\/p>\n<\/p>\n<\/p>\n

2<\/p>\n

\n

\n

(v) No payment made by the Company, any of the Guarantors, any other
\nguarantor or any other Person or received or collected by the Purchasers from
\nthe Company, any of the Guarantors, any other guarantor or any other Person by
\nvirtue of any action or proceeding or any set-off or appropriation or
\napplication at any time or from time to time in reduction of or in payment of
\nthe Obligations shall be deemed to modify, reduce, release or otherwise affect
\nthe liability of any Guarantor hereunder which shall, notwithstanding any such
\npayment (other than any payment made by such Guarantor in respect of the
\nObligations or any payment received or collected from such Guarantor in respect
\nof the Obligations), remain liable for the Obligations up to the maximum
\nliability of such Guarantor hereunder until the Obligations are indefeasibly
\npaid in full.<\/p>\n<\/p>\n<\/p>\n

(vi) Notwithstanding anything to the contrary in this Guarantee, with respect
\nto any defaulted non-monetary Obligations the specific performance of which by
\nthe Guarantors is not reasonably possible (e.g. the issuance of the Company’s
\nCommon Stock), the Guarantors shall only be liable for making the Purchasers
\nwhole on a monetary basis for the Company’s failure to perform such Obligations
\nin accordance with the Transaction Documents.<\/p>\n<\/p>\n<\/p>\n

(b) Right of Contribution<\/u>. Subject to Section 2(c), each Guarantor
\nhereby agrees that to the extent that a Guarantor shall have paid more than its
\nproportionate share of any payment made hereunder, such Guarantor shall be
\nentitled to seek and receive contribution from and against any other Guarantor
\nhereunder which has not paid its proportionate share of such payment. Each
\nGuarantor’s right of contribution shall be subject to the terms and conditions
\nof Section 2(c). The provisions of this Section 2(b) shall in no respect limit
\nthe obligations and liabilities of any Guarantor to the Purchasers and each
\nGuarantor shall remain liable to the Purchasers for the full amount guaranteed
\nby such Guarantor hereunder.<\/p>\n<\/p>\n

(c) No Subrogation<\/u>. Notwithstanding any payment made by any Guarantor
\nhereunder or any set-off or application of funds of any Guarantor by the
\nPurchasers, no Guarantor shall be entitled to be subrogated to any of the rights
\nof the Purchasers against the Company or any other Guarantor or any collateral
\nsecurity or guarantee or right of offset held by the Purchasers for the payment
\nof the Obligations, nor shall any Guarantor seek or be entitled to seek any
\ncontribution or reimbursement from the Company or any other Guarantor in respect
\nof payments made by such Guarantor hereunder, until all amounts owing to the
\nPurchasers by the Company on account of the Obligations are indefeasibly paid in
\nfull. If any amount shall be paid to any Guarantor on account of such
\nsubrogation rights at any time when all of the Obligations shall not have been
\npaid in full, such amount shall be held by such Guarantor in trust for the
\nPurchasers, segregated from other funds of such Guarantor, and shall, forthwith
\nupon receipt by such Guarantor, be turned over to the Purchasers in the exact
\nform received by such Guarantor (duly indorsed by such Guarantor to the
\nPurchasers, if required), to be applied against the Obligations, whether matured
\nor unmatured, in such order as the Purchasers may determine.<\/p>\n<\/p>\n

3<\/p>\n

\n

\n

(d) Amendments, Etc. With Respect to the Obligations<\/u>. Each Guarantor
\nshall remain obligated hereunder notwithstanding that, without any reservation
\nof rights against any Guarantor and without notice to or further assent by any
\nGuarantor, any demand for payment of any of the Obligations made by the
\nPurchasers may be rescinded by the Purchasers and any of the Obligations
\ncontinued, and the Obligations, or the liability of any other Person upon or for
\nany part thereof, or any collateral security or guarantee therefor or right of
\noffset with respect thereto, may, from time to time, in whole or in part, be
\nrenewed, extended, amended, modified, accelerated, compromised, waived,
\nsurrendered or released by the Purchasers, and the Purchase Agreement and the
\nother Transaction Documents and any other documents executed and delivered in
\nconnection therewith may be amended, modified, supplemented or terminated, in
\nwhole or in part, as the Purchasers may deem advisable from time to time, and
\nany collateral security, guarantee or right of offset at any time held by the
\nPurchasers for the payment of the Obligations may be sold, exchanged, waived,
\nsurrendered or released. The Purchasers shall have no obligation to protect,
\nsecure, perfect or insure any Lien at any time held by them as security for the
\nObligations or for the guarantee contained in this Section 2 or any property
\nsubject thereto.<\/p>\n<\/p>\n

(e) Guarantee Absolute and Unconditional<\/u>. Each Guarantor waives any
\nand all notice of the creation, renewal, extension or accrual of any of the
\nObligations and notice of or proof of reliance by the Purchasers upon the
\nguarantee contained in this Section 2 or acceptance of the guarantee contained
\nin this Section 2; the Obligations, and any of them, shall conclusively be
\ndeemed to have been created, contracted or incurred, or renewed, extended,
\namended or waived, in reliance upon the guarantee contained in this Section 2;
\nand all dealings between the Company and any of the Guarantors, on the one hand,
\nand the Purchasers, on the other hand, likewise shall be conclusively presumed
\nto have been had or consummated in reliance upon the guarantee contained in this
\nSection 2. Each Guarantor waives to the extent permitted by law diligence,
\npresentment, protest, demand for payment and notice of default or nonpayment to
\nor upon the Company or any of the Guarantors with respect to the Obligations.
\nEach Guarantor understands and agrees that the guarantee contained in this
\nSection 2 shall be construed as a continuing, absolute and unconditional
\nguarantee of payment and performance without regard to (a) the validity or
\nenforceability of the Purchase Agreement or any other Transaction Document, any
\nof the Obligations or any other collateral security therefor or guarantee or
\nright of offset with respect thereto at any time or from time to time held by
\nthe Purchasers, (b) any defense, set-off or counterclaim (other than a defense
\nof payment or performance or fraud by Purchasers) which may at any time be
\navailable to or be asserted by the Company or any other Person against the
\nPurchasers, or (c) any other circumstance whatsoever (with or without notice to
\nor knowledge of the Company or such Guarantor) which constitutes, or might be
\nconstrued to constitute, an equitable or legal discharge of the Company for the
\nObligations, or of such Guarantor under the guarantee contained in this Section
\n2, in bankruptcy or in any other instance. When making any demand hereunder or
\notherwise pursuing its rights and remedies hereunder against any Guarantor, the
\nPurchasers may, but shall be under no obligation to, make a similar demand on or
\notherwise pursue such rights and remedies as they may have against the Company,
\nany other Guarantor or any other Person or against any collateral security or
\nguarantee for the Obligations or any right of offset with respect thereto, and
\nany failure by the Purchasers to make any such demand, to pursue such other
\nrights or remedies or to collect any payments from the Company, any other
\nGuarantor or any other Person or to realize upon any such collateral security or
\nguarantee or to exercise any such right of offset, or any release of the
\nCompany, any other Guarantor or any other Person or any such collateral
\nsecurity, guarantee or right of offset, shall not relieve any Guarantor of any
\nobligation or liability hereunder, and shall not impair or affect the rights and
\nremedies, whether express, implied or available as a matter of law, of the
\nPurchasers against any Guarantor. For the purposes hereof, “demand” shall
\ninclude the commencement and continuance of any legal proceedings.<\/p>\n<\/p>\n

4<\/p>\n

\n

\n

(f) Reinstatement<\/u>. The guarantee contained in this Section 2 shall
\ncontinue to be effective, or be reinstated, as the case may be, if at any time
\npayment, or any part thereof, of any of the Obligations is rescinded or must
\notherwise be restored or returned by the Purchasers upon the insolvency,
\nbankruptcy, dissolution, liquidation or reorganization of the Company or any
\nGuarantor, or upon or as a result of the appointment of a receiver, intervenor
\nor conservator of, or trustee or similar officer for, the Company or any
\nGuarantor or any substantial part of its property, or otherwise, all as though
\nsuch payments had not been made.<\/p>\n<\/p>\n<\/p>\n

(g) Payments<\/u>. Each Guarantor hereby guarantees that payments hereunder
\nwill be paid to the Purchasers without set-off or counterclaim in U.S. dollars
\nat the address set forth or referred to in the Signature Pages to the Purchase
\nAgreement.<\/p>\n<\/p>\n<\/p>\n

3. Representations and Warranties<\/u>. Each Guarantor hereby makes the
\nfollowing representations and warranties to Purchasers as of the date hereof:\n<\/p>\n<\/p>\n

(a) Organization and Qualification<\/u>. The Guarantor is a corporation,
\nduly incorporated, validly existing and in good standing under the laws of the
\napplicable jurisdiction set forth on Schedule 1, with the requisite corporate
\npower and authority to own and use its properties and assets and to carry on its
\nbusiness as currently conducted. The Guarantor has no subsidiaries other than
\nthose identified as such on the Disclosure Schedules to the Purchase Agreement.
\nThe Guarantor is duly qualified to do business and is in good standing as a
\nforeign corporation in each jurisdiction in which the nature of the business
\nconducted or property owned by it makes such qualification necessary, except
\nwhere the failure to be so qualified or in good standing, as the case may be,
\ncould not, individually or in the aggregate, (x) adversely affect the legality,
\nvalidity or enforceability of any of this Guarantee in any material respect, (y)
\nhave a material adverse effect on the results of operations, assets, prospects,
\nor financial condition of the Guarantor or (z) adversely impair in any material
\nrespect the Guarantor’s ability to perform fully on a timely basis its
\nobligations under this Guarantee (a “Material Adverse Effect<\/u>“).<\/p>\n<\/p>\n

5<\/p>\n

\n

\n

(b) Authorization; Enforcement<\/u>. The Guarantor has the requisite
\ncorporate power and authority to enter into and to consummate the transactions
\ncontemplated by this Guarantee, and otherwise to carry out its obligations
\nhereunder. The execution and delivery of this Guarantee by the Guarantor and the
\nconsummation by it of the transactions contemplated hereby have been duly
\nauthorized by all requisite corporate action on the part of the Guarantor. This
\nGuarantee has been duly executed and delivered by the Guarantor and constitutes
\nthe valid and binding obligation of the Guarantor enforceable against the
\nGuarantor in accordance with its terms, except as such enforceability may be
\nlimited by applicable bankruptcy, insolvency, reorganization, moratorium,
\nliquidation or similar laws relating to, or affecting generally the enforcement
\nof, creditors’ rights and remedies or by other equitable principles of general
\napplication.<\/p>\n<\/p>\n<\/p>\n

(c) No Conflicts<\/u>. The execution, delivery and performance of this
\nGuarantee by the Guarantor and the consummation by the Guarantor of the
\ntransactions contemplated thereby do not and will not (i) conflict with or
\nviolate any provision of its Certificate of Incorporation or By-laws or (ii)
\nconflict with, constitute a default (or an event which with notice or lapse of
\ntime or both would become a default) under, or give to others any rights of
\ntermination, amendment, acceleration or cancellation of, any agreement,
\nindenture or instrument to which the Guarantor is a party, or (iii) result in a
\nviolation of any law, rule, regulation, order, judgment, injunction, decree or
\nother restriction of any court or governmental authority to which the Guarantor
\nis subject (including federal and state securities laws and regulations), or by
\nwhich any material property or asset of the Guarantor is bound or affected,
\nexcept in the case of each of clauses (ii) and (iii), such conflicts, defaults,
\nterminations, amendments, accelerations, cancellations and violations as could
\nnot, individually or in the aggregate, have or result in a Material Adverse
\nEffect. The business of the Guarantor is not being conducted in violation of any
\nlaw, ordinance or regulation of any governmental authority, except for
\nviolations which, individually or in the aggregate, do not have a Material
\nAdverse Effect.<\/p>\n<\/p>\n

6<\/p>\n

\n

\n

(d) Consents and Approvals<\/u>. Except as set forth on Schedule 3.1(e) of
\nthe Disclosure Schedule to the Purchase Agreement, the Guarantor is not required
\nto obtain any consent, waiver, authorization or order of, or make any filing or
\nregistration with, any court or other federal, state, local, foreign or other
\ngovernmental authority or other person in connection with the execution,
\ndelivery and performance by the Guarantor of this Guarantee.<\/p>\n<\/p>\n<\/p>\n

(e) Purchase Agreement<\/u>. The representations and warranties of the
\nCompany set forth in the Purchase Agreement as they relate to such Guarantor,
\neach of which is hereby incorporated herein by reference, are true and correct
\nas of each time such representations are deemed to be made pursuant to such
\nPurchase Agreement, and the Purchasers shall be entitled to rely on each of them
\nas if they were fully set forth herein, provided that each reference in each
\nsuch representation and warranty to the Company’s knowledge shall, for the
\npurposes of this Section 3, be deemed to be a reference to such Guarantor’s
\nknowledge.<\/p>\n<\/p>\n<\/p>\n

(f) Foreign Law<\/u>. Each Guarantor has consulted with appropriate foreign
\nlegal counsel with respect to any of the above representations for which
\nnon-U.S. law is applicable. Such foreign counsel have advised each applicable
\nGuarantor that such counsel knows of no reason why such non-US Guarantor could
\nnot make such representation. Such foreign counsel were provided with copies of
\nthis Subsidiary Guarantee and the Transaction Documents prior to rendering their
\nadvice.<\/p>\n<\/p>\n<\/p>\n

4. Covenants<\/u>.<\/p>\n<\/p>\n<\/p>\n

(a) Each Guarantor covenants and agrees with the Purchasers that, from and
\nafter the date of this Guarantee until the Obligations shall have been
\nindefeasibly paid in full, such Guarantor shall take, and\/or shall refrain from
\ntaking, as the case may be, each commercially reasonable action that is
\nnecessary to be taken or not taken, as the case may be, so that no Event of
\nDefault (as defined in the Debentures) is caused by the failure to take such
\naction or to refrain from taking such action by such Guarantor.<\/p>\n<\/p>\n

(b) So long as any of the Obligations are outstanding, unless Purchasers
\nholding at least 67% of the aggregate principal amount of the then outstanding
\nDebentures shall otherwise consent in writing, each Guarantor will not directly
\nor indirectly on or after the date of this Guarantee:<\/p>\n<\/p>\n<\/p>\n

i. except for Permitted Indebtedness as defined in the Debentures and as
\napplied to each Guarantor in place of “Company,” enter into, create, incur,
\nassume or suffer to exist any indebtedness for borrowed money of any kind,
\nincluding but not limited to, a guarantee, on or with respect to any of its
\nproperty or assets now owned or hereafter acquired or any interest therein or
\nany income or profits therefrom;<\/p>\n<\/p>\n<\/p>\n

7<\/p>\n

\n

\n

ii. except for Permitted Liens as defined in the Debentures and as applied to
\neach Guarantor in place of “Company,”enter into, create, incur, assume or suffer
\nto exist any liens of any kind, on or with respect to any of its property or
\nassets now owned or hereafter acquired or any interest therein or any income or
\nprofits therefrom;<\/p>\n<\/p>\n<\/p>\n

iii. amend its certificate of incorporation, bylaws or other charter
\ndocuments so as to adversely affect any rights of any Purchaser;<\/p>\n<\/p>\n<\/p>\n

iv. repay, repurchase or offer to repay, repurchase or otherwise acquire more
\nthan a de minimis number of shares of its securities or debt obligations, except
\nas such may come due in the ordinary course;<\/p>\n<\/p>\n<\/p>\n

v. pay cash dividends on any equity securities of the Company;<\/p>\n<\/p>\n<\/p>\n

vi. enter into any transaction with any Affiliate of the Guarantor which
\nwould be required to be disclosed in any public filing of the Company with the
\nCommission, unless such transaction is made on an arm153s-length basis and
\nexpressly approved by a majority of the disinterested directors of the Company
\n(even if less than a quorum otherwise required for board approval); or<\/p>\n<\/p>\n<\/p>\n

vii. enter into any agreement with respect to any of the foregoing.<\/p>\n<\/p>\n<\/p>\n

5. Miscellaneous<\/u>.<\/p>\n<\/p>\n<\/p>\n

(a) Amendments in Writing<\/u>. None of the terms or provisions of this
\nGuarantee may be waived, amended, supplemented or otherwise modified except in
\nwriting by the Purchasers.<\/p>\n<\/p>\n

(b) Notices<\/u>. All notices, requests and demands to or upon the
\nPurchasers or any Guarantor hereunder shall be effected in the manner provided
\nfor in the Purchase Agreement, provided that any such notice, request or demand
\nto or upon any Guarantor shall be addressed to such Guarantor at its notice
\naddress set forth on Schedule 5(b)<\/u> hereof.<\/p>\n<\/p>\n<\/p>\n

(c) No Waiver By Course Of Conduct; Cumulative Remedies<\/u>. The
\nPurchasers shall not by any act (except by a written instrument pursuant to
\nSection 5(a)), delay, indulgence, omission or otherwise be deemed to have waived
\nany right or remedy hereunder or to have acquiesced in any default under the
\nTransaction Documents or Event of Default. No failure to exercise, nor any delay
\nin exercising, on the part of the Purchasers, any right, power or privilege
\nhereunder shall operate as a waiver thereof. No single or partial exercise of
\nany right, power or privilege hereunder shall preclude any other or further
\nexercise thereof or the exercise of any other right, power or privilege. A
\nwaiver by the Purchasers of any right or remedy hereunder on any one occasion
\nshall not be construed as a bar to any right or remedy which the Purchasers
\nwould otherwise have on any future occasion. The rights and remedies herein
\nprovided are cumulative, may be exercised singly or concurrently and are not
\nexclusive of any other rights or remedies provided by law.<\/p>\n<\/p>\n<\/p>\n

8<\/p>\n

\n

\n

(d) Enforcement Expenses; Indemnification<\/u>.<\/p>\n<\/p>\n

(i) Each Guarantor agrees to pay, or reimburse the Purchasers for, all its
\ncosts and expenses incurred in collecting against such Guarantor under the
\nguarantee contained in Section 2 or otherwise enforcing or preserving any rights
\nunder this Guarantee and the other Transaction Documents to which such Guarantor
\nis a party, including, without limitation, the reasonable fees and disbursements
\nof counsel to the Purchasers.<\/p>\n<\/p>\n

(ii) Each Guarantor agrees to pay, and to save the Purchasers harmless from,
\nany and all liabilities with respect to, or resulting from any delay in paying,
\nany and all stamp, excise, sales or other taxes which may be payable or
\ndetermined to be payable in connection with any of the transactions contemplated
\nby this Guarantee.<\/p>\n<\/p>\n<\/p>\n

(iii) Each Guarantor agrees to pay, and to save the Purchasers harmless from,
\nany and all liabilities, obligations, losses, damages, penalties, actions,
\njudgments, suits, costs, expenses or disbursements of any kind or nature
\nwhatsoever with respect to the execution, delivery, enforcement, performance and
\nadministration of this Guarantee to the extent the Company would be required to
\ndo so pursuant to the Purchase Agreement.<\/p>\n<\/p>\n<\/p>\n

(iv) The agreements in this Section shall survive repayment of the
\nObligations and all other amounts payable under the Purchase Agreement and the
\nother Transaction Documents.<\/p>\n<\/p>\n<\/p>\n

(e) Successor and Assigns<\/u>. This Guarantee shall be binding upon the
\nsuccessors and assigns of each Guarantor and shall inure to the benefit of the
\nPurchasers and their respective successors and assigns; provided that no
\nGuarantor may assign, transfer or delegate any of its rights or obligations
\nunder this Guarantee without the prior written consent of the Purchasers.<\/p>\n<\/p>\n

9<\/p>\n

\n

\n

(f) Set-Off<\/u>. Each Guarantor hereby irrevocably authorizes the
\nPurchasers at any time and from time to time while an Event of Default under any
\nof the Transaction Documents shall have occurred and be continuing, without
\nnotice to such Guarantor or any other Guarantor, any such notice being expressly
\nwaived by each Guarantor, to set-off and appropriate and apply any and all
\ndeposits, credits, indebtedness or claims, in any currency, in each case whether
\ndirect or indirect, absolute or contingent, matured or unmatured, at any time
\nheld or owing by the Purchasers to or for the credit or the account of such
\nGuarantor, or any part thereof in such amounts as the Purchasers may elect,
\nagainst and on account of the obligations and liabilities of such Guarantor to
\nthe Purchasers hereunder and claims of every nature and description of the
\nPurchasers against such Guarantor, in any currency, whether arising hereunder,
\nunder the Purchase Agreement, any other Transaction Document or otherwise, as
\nthe Purchasers may elect, whether or not the Purchasers have made any demand for
\npayment and although such obligations, liabilities and claims may be contingent
\nor unmatured. The Purchasers shall notify such Guarantor promptly of any such
\nset-off and the application made by the Purchasers of the proceeds thereof,
\nprovided that the failure to give such notice shall not affect the validity of
\nsuch set-off and application. The rights of the Purchasers under this Section
\nare in addition to other rights and remedies (including, without limitation,
\nother rights of set-off) which the Purchasers may have.<\/p>\n<\/p>\n

(g) Counterparts<\/u>. This Guarantee may be executed by one or more of the
\nparties to this Guarantee on any number of separate counterparts (including by
\ntelecopy), and all of said counterparts taken together shall be deemed to
\nconstitute one and the same instrument.<\/p>\n<\/p>\n<\/p>\n

(h) Severability<\/u>. Any provision of this Guarantee which is prohibited
\nor unenforceable in any jurisdiction shall, as to such jurisdiction, be
\nineffective to the extent of such prohibition or unenforceability without
\ninvalidating the remaining provisions hereof, and any such prohibition or
\nunenforceability in any jurisdiction shall not invalidate or render
\nunenforceable such provision in any other jurisdiction.<\/p>\n<\/p>\n<\/p>\n

(i) Section Headings<\/u>. The Section headings used in this Guarantee are
\nfor convenience of reference only and are not to affect the construction hereof
\nor be taken into consideration in the interpretation hereof.<\/p>\n<\/p>\n<\/p>\n

(j) Integration<\/u>. This Guarantee and the other Transaction Documents
\nrepresent the agreement of the Guarantors and the Purchasers with respect to the
\nsubject matter hereof and thereof, and there are no promises, undertakings,
\nrepresentations or warranties by the Purchasers relative to subject matter
\nhereof and thereof not expressly set forth or referred to herein or in the other
\nTransaction Documents.<\/p>\n<\/p>\n<\/p>\n

10<\/p>\n

\n

\n

(k) Governing Laws<\/u>. All questions concerning the construction,
\nvalidity, enforcement and interpretation of this Guarantee shall be governed by
\nand construed and enforced in accordance with the internal laws of the State of
\nNew York, without regard to the principles of conflicts of law thereof. Each of
\nthe Company and the Guarantors agree that all proceedings concerning the
\ninterpretations, enforcement and defense of the transactions contemplated by
\nthis Guarantee (whether brought against a party hereto or its respective
\naffiliates, directors, officers, shareholders, partners, members, employees or
\nagents) shall be commenced exclusively in the state and federal courts sitting
\nin the City of New York, Borough of Manhattan. Each of the Company and the
\nGuarantors hereby irrevocably submits to the exclusive jurisdiction of the state
\nand federal courts sitting in the City of New York, Borough of Manhattan for the
\nadjudication of any dispute hereunder or in connection herewith or with any
\ntransaction contemplated hereby or discussed herein, and hereby irrevocably
\nwaives, and agrees not to assert in any proceeding, any claim that it is not
\npersonally subject to the jurisdiction of any such court, that such proceeding
\nis improper. Each party hereto hereby irrevocably waives personal service of
\nprocess and consents to process being served in any such proceeding by mailing a
\ncopy thereof via registered or certified mail or overnight delivery (with
\nevidence of delivery) to such party at the address in effect for notices to it
\nunder this Guarantee and agrees that such service shall constitute good and
\nsufficient service of process and notice thereof. Nothing contained herein shall
\nbe deemed to limit in any way any right to serve process in any manner permitted
\nby law. Each party hereto hereby irrevocably waives, to the fullest extent
\npermitted by applicable law, any and all right to trial by jury in any legal
\nproceeding arising out of or relating to this Guarantee or the transactions
\ncontemplated hereby.<\/p>\n<\/p>\n<\/p>\n

(l) Acknowledgements<\/u>. Each Guarantor hereby acknowledges that:<\/p>\n<\/p>\n<\/p>\n

(i) it has been advised by counsel in the negotiation, execution and delivery
\nof this Guarantee and the other Transaction Documents to which it is a party;\n<\/p>\n<\/p>\n

(ii) the Purchasers have no fiduciary relationship with or duty to any
\nGuarantor arising out of or in connection with this Guarantee or any of the
\nother Transaction Documents, and the relationship between the Guarantors, on the
\none hand, and the Purchasers, on the other hand, in connection herewith or
\ntherewith is solely that of debtor and creditor; and<\/p>\n<\/p>\n<\/p>\n

(iii) no joint venture is created hereby or by the other Transaction
\nDocuments or otherwise exists by virtue of the transactions contemplated hereby
\namong the Guarantors and the Purchasers.<\/p>\n<\/p>\n

(m) Release of Guarantors<\/u>. Each Guarantor will be released from all
\nliability hereunder concurrently with the indefeasible repayment in full of all
\namounts owed under the Purchase Agreement, the Debentures and the other
\nTransaction Documents.<\/p>\n<\/p>\n<\/p>\n

11<\/p>\n

\n

\n

(n) Subordination.<\/u> Purchasers hereby state and confirm that all
\nobligations of Guarantors as set forth and evidenced by this Subsidiary
\nGuarantee shall be subordinated in right of payment and priority to the payment
\nin full of each Guarantor153s obligations to its senior lender as set forth on
\nSchedule 5(n) to this Guarantee.<\/p>\n<\/p>\n

(o) WAIVER OF JURY TRIAL<\/u>. EACH GUARANTOR AND, BY ACCEPTANCE OF
\nTHE BENEFITS HEREOF, THE PURCHASERS, HEREBY IRREVOCABLY AND UNCONDITIONALLY
\nWAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE
\nAND FOR ANY COUNTERCLAIM THEREIN.<\/strong><\/p>\n<\/p>\n<\/p>\n

*********************<\/p>\n

\n<\/p>\n<\/p>\n

(Signature Pages Follow)<\/em><\/p>\n

\n<\/p>\n

12<\/p>\n

\n

\n

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be
\nduly executed and delivered as of the date first above written.<\/p>\n<\/p>\n<\/p>\n

SIGNATURE INDUSTRIES LIMITED<\/strong><\/p>\n<\/p>\n<\/p>\n<\/p>\n

By:_________________________________<\/p>\n<\/p>\n

Name:<\/p>\n<\/p>\n

Title:<\/p>\n<\/p>\n<\/p>\n<\/p>\n

DESTRON FEARING CORPORATION<\/strong><\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n

By:_________________________________<\/p>\n<\/p>\n

Name:<\/p>\n<\/p>\n

Title:<\/p>\n<\/p>\n<\/p>\n

13<\/p>\n

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