EXHIBIT 10.10
GUARANTY
This GUARANTY dated as of February 1, 2005 (the "Guaranty"), is given,
by XXXX XXXXXX (the "Guarantor"), in favor of CORNELL CAPITAL PARTNERS, LP, a
Delaware limited partnership ("Cornell"). Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth in the
Promissory Note of even date herewith given by ARIEL WAY, INC., a Delaware
corporation (the "Company") to Cornell as amended, restated, supplemented or
otherwise modified from time to time, the "Promissory Note").
WHEREAS:
A. To induce Cornell to enter into the Promissory Note in the principal
amount of Four Hundred Thousand Dollars ($400,000), the Guarantor has agreed to
provide a guaranty of the payment and performance obligations of the Company
under the Promissory Note and a Pledge Agreement (the "Pledge") of even date
herewith among the Company, Cornell, and Xxxx Xxxxxx (collectively, the Note,
the Pledge and this Guaranty are referred to as the "Transaction Documents").
B. The Guarantor is an affiliate of the Company and the Guarantor
acknowledges that without this Guaranty Cornell would not be willing to enter
into the Promissory Note.
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 Guarantors hereby
agrees as follows:
1. Guaranty.
1.1 Guaranty. Except as otherwise provided in this Section 1.1, the
Guarantor, as direct obligor and not merely as surety, hereby unconditionally,
absolutely, and irrevocably guarantees to Cornell (i) that the Company shall
repay to Cornell the principal amount plus accrued interest within the period of
time provided in the Promissory Note, and all other amounts due to Cornell under
the Promissory Note, including, without limitation, all reasonable fees and
costs incurred by Cornell in collecting or securing or attempting to collect or
secure the Promissory Note, including reasonable attorneys' fees and expenses,
whether or not involving litigation and/or appellate or bankruptcy proceedings
(collectively, the "Obligations"), and (ii) the full and prompt performance and
payment of all of the Company's Obligations under the Promissory Note and the
other Transaction Documents. Except as otherwise provided in this Section 1.1,
if the Company should default in the payment or performance of any of the
Obligations, the Guarantor, jointly and severally with the Guarantor, as direct
obligor and not merely as a surety, shall forthwith pay or perform such
Obligations without notice or demand by Cornell in the manner and on the day
required by this Guaranty. Notwithstanding anything to the contrary set forth
above and solely with respect to the original principal amount due under the
Promissory Note, the Guarantor shall be solely responsible for the payment of a
maximum of Four Hundred Thousand Dollars ($400,000) in principal plus interest.
In the event of default, Cornell shall first apply the proceeds from the sale of
the Guarantor's common stock held pursuant to the Pledge to pay the principal
and interest due on the Promissory Note prior to enforcing its rights against
the Guarantor under this Guaranty.
1.2 Continuing Guaranty. The Guarantor agrees that their 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, a
Guarantor or any other person or foreclosure of any security interests or liens
available to Cornell, its successors, endorsees or assigns. Cornell 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 Company or 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 Cornell 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 Discharge. The Guarantor covenants and agrees that this Guaranty
will not be discharged, except by complete performance of their obligations
contained herein. Notwithstanding anything to the contrary herein, so long as no
amounts of principal, interest or other amounts whatsoever are due or would be
made zero simultaneously with the termination hereof, the Guarantor shall have
the right to terminate this Guaranty at any time by providing written notice of
such termination to Cornell.
1.5 Costs and Expenses. Without limiting any obligation of the
Guarantor hereunder, the Guarantor agrees, jointly and severally, to pay all
reasonable fees and costs incurred by Cornell in collecting or securing or
attempting to collect or secure this Guaranty or the Promissory Note, including,
without limitation, reasonable attorneys' fees and expenses, whether or not
involving litigation and/or appellate or bankruptcy proceedings.
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1.6 Representations and Warranties. The Guarantor hereby represents and
warrants to Cornell as follows: (a) the Guarantor has full power, right and
authority to enter into and perform his obligations under this Guaranty, and
this Guaranty has been duly executed and delivered by the Guarantor and
constitutes the valid and binding obligation of the Guarantor and is enforceable
against the Guarantor in accordance with its terms. No permits, approvals or
consents of or notifications to (a) any governmental entities, or (b) any other
persons or entities are necessary in connection with the execution, delivery and
performance by the Guarantors of this Guaranty and the consummation by the
Guarantors of the transactions contemplated hereby. Neither the execution and
delivery of this Guaranty by the Guarantors nor the performance by them of the
transactions contemplated hereby will:
(i) violate or conflict with or result in a breach of any provision of
any law, statute, rule, regulation, order, permit, judgment, ruling, injunction,
decree or other decision (collectively, "Rules") of any court or other tribunal
or any governmental entity or agency binding on a Guarantor or his properties,
or conflict with or cause an event of default under any contract or agreement of
a Guarantor; or
(ii) require any authorization, consent, approval, exemption or other
action by or notice to any court, administrative or governmental body, person,
entity or any other third party.
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 the Guarantor: Xxxx Xxxxxx
C/o Ariel Way, Inc.
0000 Xxxxxx Xxxxxxxx Xxxxx - Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
With Copies to: Xxxxxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx - Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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Xxxxxx Xxxx & Xxxxxx, XXX
0000 Xxxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxx Xxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Cornell: Cornell Capital Partners, LP
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxx X. Xxxxxx
Portfolio Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With Copies to: Xxxxx Xxxxxxxx, Esq.
000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 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) trading days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) 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 (C) 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 waive 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.
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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 the Company should default under the Promissory 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
without notice or demand by Cornell 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 a 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 Agreement.
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(d) if the Guarantor should default in the Pledge 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 Cornell,
and Cornell shall be entitled to seek and institute any and all remedies
available to it. No remedy conferred under this Guaranty upon the Cornell is
intended to be exclusive of any other remedy available to Cornell, pursuant to
the terms of this Guaranty or otherwise. No single or partial exercise by
Cornell of any right, power or remedy hereunder shall preclude any other or
further exercise thereof. The failure of Cornell 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.
Cornell's remedies provided in this Guaranty shall be cumulative and in addition
to all other remedies available to the Cornell under this Guaranty or otherwise,
at law or in equity (including a decree of specific performance and/or other
injunctive relief), no remedy of Cornell contained herein shall be deemed a
waiver of compliance with the provisions giving rise to such remedy and nothing
herein shall limit Cornell's right to pursue actual damages for any failure by a
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 Cornell. The Guarantor acknowledges that a breach by the
Guarantor of its obligations hereunder will cause irreparable harm to Cornell
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 by
the Guarantor, Cornell 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; Jurisdiction. All questions concerning the
construction, validity, enforcement and interpretation of this Guaranty 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 Courts
of the State of New Jersey, sitting in the city of Jersey City, Xxxxxx County,
New Jersey and the 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 Guaranty 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.
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2.13 Waiver of Jury Trial. AS A MATERIAL INDUCEMENT FOR CORNELL TO LOAN
TO THE COMPANY THE MONIES UNDER THE PROMISSORY NOTE AND TO ACCEPT THIS GUARANTY,
THE GUARANTORS HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
RELATED IN ANY WAY TO THIS AGREEMENT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
ASSOCIATED WITH THIS TRANSACTION.
2.14 Entire Agreement. This Guaranty (including the recitals hereto)
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.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be signed
as of the date first written above.
XXXX XXXXXX
By: _________________________________
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