SUBSIDIARY GUARANTY
Exhibit 10.11
THIS SUBSIDIARY GUARANTY (this
“Subsidiary
Guaranty”), dated as of December 1, 2008, among AmeriResource
Technologies, Inc., a Delaware corporation (the “Company”), RoboServer
Systems Corp, BizAuctions, Inc., ARRT Receivables, Inc.; AuctionWagon, West
Texas Real Estate and Resources, Inc., Self-Serve Technologies, Inc.,
Net2Auction Corporation, Business Auctions, Inc., and BizAuctions, Corp
(individually a “Subsidiary Guarantor”
and collectively, the “Subsidiary
Guarantors”), for the benefit of the secured parties signatory hereto and
their respective endorsees, transferees and assigns (individually a “Secured Party” and
collectively, the “Secured
Parties”).
W I T N E S S E T
H:
WHEREAS,
pursuant to a Securities Purchase Agreement, dated the date hereof, between
Company and the Secured Parties (the “Purchase Agreement”),
Company has agreed to issue to the Secured Parties and the Secured Parties have
agreed to purchase from Company certain of Company’s 10% Callable Secured
Convertible Notes, due three years from the date of issue (the “Notes”), which are
convertible into shares of Company’s Common Stock, par value $.0001 per share
(the “Common
Stock”). In connection therewith, Company shall issue the
Secured Parties certain Common Stock purchase warrants (the “Warrants”);
and
WHEREAS,
the Parent, A holdings company of multiple subsidiaries and its Subsidiary
entities have been, and are now, engaged in several business segments including
retail and wholesale inventory sales, technology development and sales as well
as other activities. The Parent has provided
financing for the Subsidiary, and the Subsidiary has relied upon the Parent to
provide such financing. In addition, it is anticipated that, if the
Subsidiary executes and delivers this, the Parent will continue to provide such
financing to the Subsidiary, and that the proceeds will be used, in part, for
the general working capital purposes of the Subsidiary;
WHEREAS,
the Subsidiary Guarantors constitute all of the subsidiaries of the Company and
it is in the best interest of the Subsidiary Guarantors as subsidiaries of the
Company and the indirect beneficiaries of the Note, that the Secured Parties
loan funds to the Company in exchange for the Note;
WHEREAS,
as a material inducement to the Secured Parties to purchase the Note, the
Secured Parties have required and the Subsidiary Guarantors have agreed to
unconditionally guarantee the timely and full satisfaction of all obligations of
the Company, whether matured or unmatured, now or hereafter existing or created
and becoming due and payable (the “Obligations”) to the
Secured Parties, their successors, endorsees, transferees or assigns under the
Note; and
WHEREAS,
in light of the foregoing, each Subsidiary Guarantor expects to derive
substantial benefit from the proceeds of the Note and, in furtherance thereof,
has agreed to execute and deliver this Subsidiary Guaranty.
NOW,
THEREFORE, in consideration of the foregoing recitals, and the mutual covenants
contained herein, the parties hereby agree as follows:
1. Guaranty. The
Subsidiary Guarantors, jointly and severally, hereby absolutely, unconditionally
and irrevocably guarantee to the Secured Parties, their successors, endorsees,
transferees and assigns the due and punctual performance and payment of the
Obligations owing to the Secured Parties, their successors, endorsees,
transferees or assigns when due, all at the time and place and in the amount and
manner prescribed in, and otherwise in accordance with, the Note, regardless of
whether or not the Secured Parties or anyone on behalf of the Secured Parties
shall have instituted any suit, action or proceeding or exhausted its remedies
or taken any steps to enforce any rights against the Company or any other person
to compel any such performance or observance or to collect all or part of any
such amount, either pursuant to the provisions of the Note or at law or in
equity, and regardless of any other condition or contingency.
2.
Waiver of
Demand. The Subsidiary Guarantors hereby
unconditionally: (i) waives any requirement that the Secured Parties,
in the event of a breach in any material respect by the Company of any of its
representations or warranties in the Note, first make demand upon, or seek to
enforce remedies against, the Company or any other person before demanding
payment of enforcement hereunder; (ii) covenants that this Subsidiary Guaranty
will not be discharged except by complete performance of the Obligations of the
Note; (iii) agrees that this Subsidiary Guaranty shall remain in full force and
effect without regard to, and shall not be affected or impaired, without
limitation, by, any invalidity, irregularity or unenforceability in whole or in
part of the Note or any limitation on the liability of the Company thereunder,
or any limitation on the method or terms of payment thereunder which may now or
hereafter be caused or imposed in any manner whatsoever; and (iv) waives
diligence, presentment and protest with respect to, and notice of default in the
performance or payment of any Obligation by the Company under or in connection
with the Note.
3. Absolute
Obligation. Each Subsidiary Guarantor acknowledges and agrees
that (i) no Secured Party has made any representation or warranty to such
Subsidiary Guarantor with respect to the Company, any of its subsidiaries, any
Note or any agreement, instrument or document executed or delivered in
connection therewith, or any other matter whatsoever, and (ii) such Subsidiary
Guarantor shall be liable hereunder, and such liability shall not be affected or
impaired, irrespective of (A) the validity or enforceability of the Note, or any
agreement, instrument or document executed or delivered in connection therewith,
or the collectability of any of the Obligations, (B) the preference or priority
ranking with respect to any of the Obligations, (C) the existence, validity,
enforceability or perfection of any security interest or collateral security
with respect to the Note, or the release, exchange, substitution or loss or
impairment of any such security interest or collateral security, (D) any
failure, delay, neglect or omission by any Secured Party to realize upon or
protect any direct or indirect collateral security, indebtedness, liability or
obligation, or any agreement, instrument or document executed or delivered in
connection therewith, or any of the Obligations, (E) the existence or exercise
of any right of set-off by any Secured Party, (F) the existence, validity or
enforceability of any other guaranty with respect to any of the Obligations, the
liability of any other person in respect of any of the Obligations, or the
release of any such person or any other guarantor of any of the Obligations, (G)
any act or omission of any Secured Party in connection with the administration
of any Note or any of the Obligations, (H) the bankruptcy, insolvency,
reorganization or receivership of, or any other proceeding for the relief of
debtors commenced by or against, any person, (I) the disaffirmance or rejection,
or the purported disaffirmance or purported rejection, of any of the
Obligations, or any agreement, instrument or document executed or delivered in
connection therewith, in any bankruptcy, insolvency, reorganization or
receivership, or any other proceeding for the relief of debtor, relating to any
person, (J) any law, regulation or decree now or hereafter in effect which might
in any manner affect any of the terms or provisions of the Note, or any
agreement, instrument or document executed or delivered in connection therewith
or any of the Obligations, or which might cause or permit to be invoked any
alteration in the time, amount, manner or payment or performance of any of the
Company's obligations and liabilities (including the Obligations), (K) the
merger or consolidation of the Company into or with any person, (L) the sale by
the Company of all or any part of its assets, (M) the fact that at any time and
from time to time none of the Obligations may be outstanding or owing to any
Secured Party, (N) any amendment or modification of, or supplement to, any Note,
or (O) any other reason or circumstance which might otherwise constitute a
defense available to or a discharge of the Company in respect of its obligations
or liabilities (including the Obligations) or of such Subsidiary Guarantor in
respect of any of the Obligations (other than by the performance in full
thereof).
4.
Release. The
obligations, covenants, agreements and duties of the Subsidiary Guarantors
hereunder shall not be released, affected or impaired by any assignment or
transfer, in whole or in part, of the Note or any Obligation, although made
without notice to or the consent of the Subsidiary Guarantors, or any waiver by
the Secured Parties, or by any other person, of the performance or observance by
the Company or the Subsidiary Guarantors of any of the agreements, covenants,
terms or conditions contained in the Note, or any indulgence in or the extension
of the time or renewal thereof, or the modification or amendment (whether
material or otherwise), or the voluntary or involuntary liquidation, sale or
other disposition of all or any portion of the stock or assets of the Company or
the Subsidiary Guarantors, or any receivership, insolvency, bankruptcy,
reorganization, or other similar proceedings, affecting the Company or the
Subsidiary Guarantors or any assets of the Company or the Subsidiary Guarantors,
or the release of any property from any security for any Obligation, or the
impairment of any such property or security, or the release or discharge of the
Company or the Subsidiary Guarantors from the performance or observance of any
agreement, covenant, term or condition contained in or arising out of the Note
by operation of law, or the merger or consolidation of the Company, or any other
cause, whether similar or dissimilar to the foregoing.
5.
Subrogation.
(a) Unless
and until complete performance of all the Obligations, the Subsidiary Guarantors
shall not be entitled to exercise any right of subrogation to any of the rights
of the Secured Parties against the Company or any collateral security or
guaranty held by the Secured Parties for the payment or performance of the
Obligations, nor shall the Subsidiary Guarantors seek any reimbursement from the
Company in respect of payments made by the Subsidiary Guarantors
hereunder.
(b) In
the event that the Subsidiary Guarantors shall become obligated to perform or
pay any sums hereunder, or in the event that for any reason the Company is now
or shall hereafter become indebted to the Subsidiary Guarantors, the amount of
such sum shall at all times be subordinate as to lien, time of payment and in
all other respects, to the amounts owing to the Secured Parties under the Note
and the Subsidiary Guarantors shall not enforce or receive payment thereof until
all Obligations due to the Secured Parties under the Transaction have been
performed or paid. Nothing herein contained is intended or shall be
construed to give to the Subsidiary Guarantors any right of subrogation in or
under the Note, or any right to participate in any way therein, or in any right,
title or interest in the assets of the Secured Parties.
6.
Application of Proceeds;
Release. The proceeds of any sale or enforcement of or against
all or any part of the cash or collateral at the time held by the Secured
Parties hereunder, shall be applied by the Secured Parties first to the payment
of the reasonable costs of any such sale or enforcement, then to the payment of
the principal amount or stated valued (as applicable) of, and interest or
dividends (as applicable) and any other payments due in respect of, the
Obligations. The remainder, if any, shall be paid to the Subsidiary
Guarantors. As used in this Subsidiary Guaranty, “proceeds” shall mean
cash, securities and other property realized in respect of the sale of any
collateral.
7.
Representations and
Warranties.
(a) The
Subsidiary Guarantors hereby represent and warrant to the Secured Parties
that:
(i) this
Subsidiary Guaranty constitutes a legal, valid and binding obligation of the
Subsidiary Guarantors, enforceable in accordance with its terms.
(ii) the
execution, delivery and performance of this Subsidiary Guaranty and other
instruments contemplated herein will not violate any provision of any order or
decree of any court or governmental instrument or of any mortgage, indenture,
contract or other agreement to which the Subsidiary Guarantors are a party or by
which the Subsidiary Guarantors may be bound, and will not result in the
creation or imposition of any lien, charge or encumbrance on, or security
interest in, any of the Subsidiary Guarantors’ properties pursuant to the
provisions of such mortgage, indenture, contract or other
agreement.
(iii) all
representations and warranties relating to it contained in the Note are true and
correct.
(b) The
Company represents and warrants to the Secured Parties that it has no knowledge
that any of the representations or warranties of the Subsidiary Guarantors
herein are incorrect or false in any material respect.
8.
No Waiver; No Election of
Remedies. No failure on the part of the Secured Parties to
exercise, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise by the
Secured Parties of any right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or
remedy. The remedies herein provided are cumulative and are not
exclusive of any remedies provided by law. In addition, the exercise
of any right or remedy of the Secured Parties at law or equity or under this
Subsidiary Guaranty or any of the documents shall not be deemed to be an
election of Pledgee’s rights or remedies under such documents or at law or
equity.
9.
Termination. This
Subsidiary Guaranty shall terminate on the date on which all Obligations have
been performed, satisfied, paid or discharged in full.
10. Further
Assurances. The parties hereto agree that, from time to time
upon the written request of any party hereto, they will execute and deliver such
further documents and do such other acts and things as such party may reasonably
request in order fully to effect the purposes of this Subsidiary
Guaranty.
11. Miscellaneous.
(a) Payment of
Fees. The Subsidiary Guarantors and the Company jointly and
severally agree to pay all costs including all reasonable attorneys’ fees and
disbursements incurred by the Secured Parties in enforcing this Subsidiary
Guaranty in accordance with its terms.
(b) Modification. This
Subsidiary Guaranty contains the entire understanding between the parties with
respect to the subject matter hereof and specifically incorporates all prior
oral and written agreements relating to the subject matter hereof. No
portion or provision of this Subsidiary Guaranty may be changed, modified,
amended, waived, supplemented, discharged, canceled or terminated orally or by
any course of dealing, or in any manner other than by an agreement in writing,
signed by the party to be charged.
(c) Notice. Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section prior to 6:30 p.m. (New York City time) on a Business
Day, (ii) the Business Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Subsidiary Guaranty later than 6:30 p.m. (New York City time)
on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii)
the Business Day following the date of mailing, if sent by nationally recognized
overnight courier services, or (iv) upon actual receipt by the party to whom
such notice is required to be given. The address for such notices and
communications shall be as follows:
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If
to the Company:
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AmeriResource
Technologies, Inc.
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0000
X. Xxxxxxx Xxxx, Xxxxx 000
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Xxx
Xxxxx, XX 00000
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Attention:
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Xxxxxx
Xxxxxxx
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Telephone:
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(000)
000-0000
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Facsimile:
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(000)
000-0000
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With
copies to:
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Xxxxx
Xxxxxx
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Xxxxxx
& Xxxxxx LLP
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000
Xxxxx 0 Xxxxx , Xxx. 000
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Attention:
Xxxxx Xxxxxx
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Xxxxxxxxx,
XX 00000
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Telephone:
(000) 000-0000
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Facsimile: (000)
000-0000
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If
to the Subsidiary Guarantors:
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RoboServer
Systems Corp,
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BizAuctions,
Inc.,
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ARRT
Receivables, Inc
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AuctionWagon,
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West
Texas Real Estate and Resources, Inc.,
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Self-Serve
Technologies, Inc.,
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Net2Auction
Corporation,
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Business
Auctions, Inc.,
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BizAuctions,
Corp
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0000
X. Xxxxxxx Xxxx, Xxxxx 000
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Xxx
Xxxxx, XX 00000
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Attention:
Xxxxxx Xxxxxxx
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Telephone:
(000) 000-0000
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Facsimile: (000)
000-0000
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If
to the Secured Parties:
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AJW
Partners, LLC
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AJW
Partners II, LLC
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AJW
Master Fund, Ltd.
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AJW
Master Fund II, Ltd.
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New
Millennium Capital Partners III, LLC
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0000
Xxxxxxxx Xxxxxxxxx, Xxxxx 000
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Xxxxxx,
Xxx Xxxx 00000
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Attention: Xxxxx
Xxxxxxxx
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Facsimile: 000-000-0000
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With
copies to:
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Xxxxxxx
Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
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0000
Xxxxxx Xxxxxx, 00xx
Xxxxx
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Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000
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Attention: Xxxxxx
X. Xxxxxxxx, Esquire
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Facsimile: 000-000-0000
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(d) Invalidity. If
any part of this Subsidiary Guaranty is contrary to, prohibited by, or deemed
invalid under applicable laws or regulations, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given effect so far as possible.
(e) Benefit of
Agreement. This Subsidiary Guaranty shall be binding upon and
inure to the parties hereto and their respective successors and
assigns.
(f) Mutual
Agreement. This Subsidiary Guaranty embodies the arm’s length
negotiation and mutual agreement between the parties hereto and shall not be
construed against either party as having been drafted by it.
(g) New York Law to
Govern. This Subsidiary Guaranty shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York without regard to the principals of conflicts of law
thereof. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and Federal courts sitting in the city of New York,
borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith 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 or that 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 in effect for
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.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the parties hereto have caused this Guaranty and Pledge
Agreement to be duly executed by their respective authorized persons as of the
date first indicated above.
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COMPANY
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AMERIRESOURCE
TECHNOLOGIES, INC.
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By:
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Xxxxxx
Xxxxxxx
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Xxxxxx
Xxxxxxx
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President
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SUBSIDIARY
GUARANTORS:
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ROBOSERVER
SYSTEMS CORP
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By:
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Xxxxxx
Xxxxxxx
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Xxxxxx
Xxxxxxx
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President
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BIZAUCTIONS,
INC.
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By:
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Xxxxxx
Xxxxxxx
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Xxxxxx
Xxxxxxx
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President
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AUCTION
WAGON
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By:
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Xxxxxx
Xxxxxxx
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Xxxxxx
Xxxxxxx
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President
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ARRT
Receivables, Inc.
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By:
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Xxxxxx
Xxxxxxx
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Xxxxxx
Xxxxxxx
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President
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WEST
TEXAS REAL ESTATE AND RESOURCES, INC.
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By:
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Xxxxxx
Xxxxxxx
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Xxxxxx
Xxxxxxx
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President
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SELF-SERVE
TECHNOLOGIES, INC.
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Xxxxxx
Xxxxxxx
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By:
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Xxxxxx
Xxxxxxx
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President
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NET2AUCTION
CORPORATION
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By:
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Xxxxxx
Xxxxxxx
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Xxxxxx
Xxxxxxx
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President
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BUSINESS
AUCTIONS, INC.
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By:
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Xxxxxx
Xxxxxxx
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Xxxxxx
Xxxxxxx
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President
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BIZAUCTIONS,
CORP
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By:
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Xxxxxx
Xxxxxxx
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Xxxxxx
Xxxxxxx
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President
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SECURED
PARTIES:
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AJW
PARTNERS, LLC
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By:
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SMS
Group, LLC
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By:
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Xxxxx
X. Xxxxxxxx
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Manager
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AJW
PARTNERS II, LLC
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By:
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SMS
Group, LLC
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By:
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Xxxxx
X. Xxxxxxxx
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Manager
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AJW
MASTER FUND, LTD.
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By:
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First
Street Manager II, LLC
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By:
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Xxxxx
X. Xxxxxxxx
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Manager
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AJW
MASTER FUND II, LTD.
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By:
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First
Street Manager II, LLC
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By:
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Xxxxx
X. Xxxxxxxx
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Manager
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NEW
MILLENNIUM CAPITAL PARTNERS III, LLC
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By:
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First
Street Manager II, LLC
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By:
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Xxxxx
X. Xxxxxxxx
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Manager
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