GUARANTY AGREEMENT
THIS GUARANTY (the "Guaranty") dated as of February 24,
2005 is given by XXXXX XXXXXXXXX (the "Guarantor"), in favor of
CORNELL CAPITAL PARTNERS, LP (the "Lender").
RECITALS:
A. This Guaranty is a condition to that certain Secured
Promissory Note (the "Promissory Note") of even date herewith.
B. The Guarantor acknowledges that without this Guaranty the
Lender would not be willing to enter into the Promissory Note.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the
mutual covenants set forth herein, and for other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged,
the Guarantor hereby agrees as follows:
1. Guaranty.
1.1 Guaranty. The Guarantor, as direct obligor and not
merely as a surety, hereby jointly and severally, unconditionally, absolutely,
and irrevocably guarantee to the Lender (i) that EYI INDUSTRIES, INC.
(the "Company") shall repay to the Lender the obligations due under that
certain Promissory Note (the "Note") of even date herewith given by the
Company to the Lender and the Note (collectively, the "Obligations")
within the period of time provided in the Note, and all other amounts due to
the Lender, including, without limitation, all reasonable fees and costs
incurred by the Lender in collecting or securing or attempting to collect or
secure the Obligations, and (ii) the full and prompt performance and
payment of all of the Obligations and the other documents delivered in
connection therewith (collectively, the "Transaction Documents"). If the
Company should default in the payment or performance of any of the
Obligations, the Guarantor, as direct obligor and not merely as a surety,
shall forthwith pay or perform such Obligations without notice or demand
by the Lender in the manner and on the day required by this Guaranty.
1.2 Continuing Guaranty. The Guarantor agrees that its
obligations pursuant to this Section 1 are unconditional, absolute, and
irrevocable and shall not be released, discharged or affected in any way by
any circumstances or condition, including, without limitation:
(a) Any amendment or modification or other change to
any of the Transaction Documents;
(b) Any failure, omission or delay on the part of the
Company to conform or comply with any term of any of the Transaction
Documents;
(c) Any release or discharge by operation of law of the
Company or any guarantor from any obligation or agreement contained in
any of the Transaction Documents or this Guaranty; and
(d) Any other occurrence, circumstance, happening or
event, whether similar or dissimilar to the foregoing and whether foreseen
or unforeseen, which otherwise might constitute a legal or equitable defense
or discharge of the liabilities of a guarantor or surety or which otherwise
might limit recourse against the Company or the Guarantor.
1.3. Guaranty of Payment and Not of Collection. The liability of
the Guarantor shall be continuing, direct and immediate and not conditional
or contingent upon either the pursuit of any remedies against the Company
or any other person or foreclosure of any security interests or liens available
to the Lender, its successors, endorsees or assigns. The Lender may accept
any payment(s), plan for adjustment of debts, plan of reorganization or
liquidation, or plan of composition or extension proposed by, or on behalf
of, the Companyor any other guarantor without in any way affecting or
discharging the liability of the Guarantor. If the Obligations are partially
paid, the Guarantor shall remain liable for any balance of such Obligations.
This Guaranty shall be revived and reinstated in the event any payment
received by the Lender on any Obligation is required to be repaid or
rescinded under present or future federal or state law or regulation relating
to bankruptcy, insolvency or other relief of debtors.
1.4 No Discharge. The Guarantor covenants and agrees that this
Guaranty will not be discharged, except by complete performance of its
obligations contained herein.
1.5 Costs and Expenses. Without limiting any obligation of the
Guarantor hereunder, the Guarantor agrees to pay all reasonable fees and
costs incurred by the Lender in collecting or securing or attempting to
collect or secure this Guaranty or the Obligations, including, without
limitation, reasonable attorneys' fees and expenses, whether or not involving
litigation and/or appellate or bankruptcy proceedings.
2. Miscellaneous.
2.1 Notices, Consents, etc. Any notices, consents, waivers or
other communications required or permitted to be given under the terms
hereof must be in writing and will be deemed to have been delivered: (i)
upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or (iii) one
(1) trading day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same.
The addresses and facsimile numbers for such communications shall be:
If to Guarantor:
EYI Industries, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx - Xxxxx 000
Xxx Xxxxx, Xxxxxx
00000
Attention: Xxx
Xxxxxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With Copy to:
Xxxxxxxxxxx &
Xxxxxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx Xxxxx 0000
Xxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Lender:
Cornell Capital
Partners, LP
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With Copy to:
Xxxxx Xxxxxxxx, Esq.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Telephone: (000)000-0000
Facsimile: (000) 000-0000
or at such other address and/or facsimile number and/or to the attention of
such other person as the recipient party has specified by written notice
given to each other party three (3) business days prior to the effectiveness
of such change. Written confirmation of receipt (i) given by the recipient
of such notice, consent, waiver or other communication, (ii) mechanically
or electronically generated by the sender's facsimile machine containing
the time, date, recipient facsimile number and an image of the first page of
such transmission or (iii) provided by a nationally recognized overnight
delivery service, shall be rebuttable evidence of personal service, receipt
by facsimile or receipt from a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively.
2.2 Waiver of Presentment. To the fullest extent permitted by
law and except as otherwise provided herein, the Guarantor waives demand,
presentment, protest, notice of dishonor, suit against or joinder of any other
person, and all other requirements necessary to charge or hold the Guarantor
liable with respect to this Guaranty.
2.3 Severability. If any provision of this Guaranty is, for any
reason, invalid or unenforceable, the remaining provisions of this Guaranty
will nevertheless be valid and enforceable and will remain in full force and
effect. Any provision of this Guaranty that is held invalid or unenforceable
by a court of competent jurisdiction will be deemed modified to the extent
necessary to make it valid and enforceable and as so modified will remain in
full force and effect.
2.4 Amendment and Waiver. This Guaranty may be amended,
or any provision of this Guaranty may be waived, provided that any such
amendment or waiver will be binding on a party hereto only if such
amendment or waiver is set forth in a writing executed by the parties hereto.
The waiver by any such party hereto of a breach of any provision of this
Guaranty shall not operate or be construed as a waiver of any other breach.
2.5. Headings. The subject headings of Articles and Sections of
this Guaranty are included for purposes of convenience only and shall not
affect the construction or interpretation of any of its provisions.
2.6 Assignment. This Guaranty will be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns, but will not be assignable or delegable by the Guarantor.
Except as otherwise provided herein, this Note shall bind and inure to the
benefit of and be enforceable by the parties and their permitted successors
and assigns.
2.7. Further Assurances. Each party will execute all documents
and take such other actions as the other parties may reasonably request in
order to consummate the transactions provided for herein and to accomplish
the purposes of this Guaranty.
2.8 Third Parties. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any person or entity,
other than the stated beneficiaries of this Guaranty and their respective
permitted successors and assigns, any rights or remedies under or by reason
of this Guaranty.
2.9 No Strict Construction. The language used in this Guaranty
will be deemed to be the language chosen by the parties hereto to express
their mutual intent, and no rule of strict construction will be applied against
any party hereto.
2.10 Event of Default. For purposes of this Guaranty, an event of
default shall be deemed to have occurred hereunder:
(a) If an event of default shall occur under any
Transaction Document, including, without limitation, an Event of Default as
defined in the Note or in the payment or performance of any of the
Obligations, the Guarantor shall fail for any reason or for no reason, to
forthwith pay or perform such Obligations when due without notice or
demand by the Lender in the manner and on the day required this Guaranty;
or
(b) If the Guarantor makes an assignment for the benefit
of creditors or admits in writing its inability to pay its debts generally as
they become due; or an order, judgment or decree is entered adjudicating
the Guarantor bankrupt or insolvent; or any order for relief with respect to
the Guarantor is entered under any bankruptcy or insolvency laws; or the
Guarantor petitions or applies to any tribunal for the appointment of a
custodian, trustee, receiver or liquidator of the Guarantor of any substantial
part of the assets of the Guarantor, or commences any proceeding relating to
the Guarantor under any bankruptcy reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction; or any such petition or application is filed, or any such
proceeding is commenced, against the Guarantor.
(c) If the Guarantor should default in any other
obligation set forth in this Guaranty.
(d) If the Guarantor should default in the Pledge and
Escrow Agreement.
Upon an event of default, all of the obligations of the Guarantor
hereunder shall be immediately due and payable without any action on the
part of the Lender, and the Lender shall be entitled to seek and institute any
and all remedies available to it. No remedy conferred under this Guaranty
upon the Lender is intended to be exclusive of any other remedy available to
the Lender, pursuant to the terms of this Guaranty or otherwise. No single
or partial exercise by the Lender of any right, power or remedy hereunder
shall preclude any other or further exercise thereof. The failure of the
Lender to exercise any right or remedy under this Guaranty or otherwise, or
delay in exercising such right or remedy, shall not operate as a waiver
thereof.
2.11 Remedies, Other Obligations, Breaches and Injunctive
Relief. The Lender's remedies provided in this Guaranty shall be
cumulative and in addition to all other remedies available to the Lender
under this Guaranty or otherwise, at law or in equity (including a decree of
specific performance and/or other injunctive relief), no remedy of the
Lender contained herein shall be deemed a waiver of compliance with the
provisions giving rise to such remedy and nothing herein shall limit the
Lender's right to pursue actual damages for any failure by the Guarantor to
comply with the terms of this Guaranty. Every right and remedy of the
Guarantor under any document executed in connection with this transaction,
including but not limited to this Guaranty and the Transaction Documents
or under applicable law may be exercised from time to time and as often as
may be deemed expedient by the Lender. The Guarantor acknowledges that
a breach by it of its obligations hereunder will cause irreparable harm to the
Lender and that the remedy at law for any such breach may be inadequate.
The Guarantor therefore agrees that, in the event of any such breach or
threatened breach, the Lender shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, and specific
performance without the necessity of showing economic loss and without
any bond or other security being required.
2.12 Governing Law; Dispute Resolution. All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New Jersey, without
giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New Jersey or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State
of New Jersey. Each party hereby irrevocably submits to the exclusive
jurisdiction of the Superior Court of the State of New Jersey sitting in
Xxxxxx County, New Jersey and the United States Federal District Court for
the District of New Jersey sitting in Newark, New Jersey, for the
adjudication of any dispute hereunder or in connection herewith or
therewith, or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address for such notices to
it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in
any manner permitted by law.
2.13 Entire Agreement. This Guaranty and the Transaction
Documents set forth the entire understanding of the parties with respect to
the subject matter hereof, and shall not be modified or affected by any offer,
proposal, statement or representation, oral or written, made by or for any
party in connection with the negotiation of the terms hereof, and may be
modified only by instruments signed by all of the parties hereto.
2.14 Attorneys' Fees. If the Guarantor fails to strictly comply
with the terms of the Guaranty, then the Guarantor shall reimburse the
Lender promptly for all fees, costs and expenses, including, without
limitation, attorneys' fees and expenses incurred by the Lender in any action
in connection with the Guaranty, including, without limitation, those
incurred: (i) during any workout, attempted workout, and/or in connection
with the rendering of legal advice as to the Lender's rights, remedies and
obligations, (ii) collecting any sums which become due to the Lender, (iii)
defending or prosecuting any proceeding or any counterclaim to any
proceeding or appeal; or (iv) the protection, preservation or enforcement of
any rights or remedies of the Lender.
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IN WITNESS WHEREOF, the Guarantor has caused this
Guaranty to be signed as of the date first written above.
THE GUARANTOR:
/s/ Xxxxx Xxxxxxxxx
XXXXX XXXXXXXXX
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