GUARANTY AGREEMENT
Exhibit 10.5
THIS
GUARANTY AGREEMENT (this “Guaranty”) is entered into as of
December 17, 2021 by and among each of the parties identified as a
Guarantor on the signature pages hereto (each, a
“Guarantor”, and
collectively, the “Guarantors”), in favor of the
purchasers signatory to the Securities Purchase Agreements (as
defined below) (together with their respective successors and
assigns, including, any future holder of the Notes (as defined
below), the “Holders”). Capitalized terms used
herein and not otherwise defined shall have the meanings ascribed
thereto in the Securities Purchase Agreements (as defined
below).
RECITALS
WHEREAS, pursuant
to a Securities Purchase Agreement, dated as of May 8, 2020 (as
amended and in effect from time to time, including any replacement
agreement therefor, the “May
2020 Securities Purchase Agreement”), among Charge
Enterprises, Inc., a Delaware corporation (formerly known as
Transworld Holdings, Inc. and GoIP Global, Inc., a Colorado
corporation) (the “Company”) and the Holders, the
Holders have extended credit to the Company as evidenced by certain
Senior Secured Convertible Notes in the aggregate principal amount
of $3,000,000.00 issued by the Company to the Holders (together
with any notes issued in exchange therefor or replacement thereof
or any additional investment made by the Holders and as the same
may be amended, supplemented, restated or otherwise modified from
time to time, the “May 2020
Senior Notes”);
WHEREAS, pursuant
to a Securities Purchase Agreement, dated as of November 3, 2020
(as amended and in effect from time to time, including any
replacement agreement therefor, the “November 2020 Securities Purchase
Agreement”) among the Company and the Holders, the
Holders have extended credit to the Company as evidenced by certain
Senior Secured Convertible Notes in the aggregate principal amount
of $3,888,889.00 issued by the Company to the Holders (together
with any notes issued in exchange therefor or replacement thereof
or any additional investment made by the Holders and as the same
may be amended, supplemented, restated or otherwise modified from
time to time, the “November
2020 Senior Notes”);
WHEREAS, pursuant
to a Securities Purchase Agreement, dated as of May 19, 2021 (as
amended and in effect from time to time, including any replacement
agreement therefor, the “May
2021 Securities Purchase Agreement”), among the
Company and the Holders, the Holders have extended credit to the
Company as evidenced by certain Senior Secured Convertible Notes in
the aggregate principal amount of $5,610,000 and certain Senior
Secured Non-convertible Notes in the aggregate principal amount of
$11,032,609.00 issued by
the Company to the Holders (together with any notes issued in
exchange therefor or replacement thereof or any additional
investment made by the Holders and as the same may be amended,
supplemented, restated or otherwise modified from time to time, the
“May 2021 Senior
Notes”);
WHEREAS, pursuant
to a Securities Purchase Agreement, dated as of the date hereof (as
amended and in effect from time to time, including any replacement
agreement therefor, the “December 2021 Securities Purchase
Agreement” and together with the May 2020 Securities
Purchase Agreement, the November 2020 Securities Purchase Agreement
and May 2021 Securities Purchase Agreement, the “Securities Purchase Agreements”),
among the Company and the Holders, the Holders have extended credit
to the Company as evidenced by certain Senior Secured
Non-convertible Notes in the aggregate principal amount of
$14,814,814.67 issued by
the Company to the Holders (together with any notes issued in
exchange therefor or replacement thereof or any additional
investment made by the Holders and as the same may be amended,
supplemented, restated or otherwise modified from time to time, the
“December 2021 Senior
Notes” and together with the May 2020 Senior Notes,
the November 2020 Senior Notes and May 2021 Senior Notes, the
“Senior Notes”);
and
WHEREAS, each
Guarantor will derive substantial direct and indirect benefit from
the provision of the loans evidenced by the Notes.
WHEREAS, entry into
this Agreement is a condition precedent to the transactions set
forth in the December 2021 Securities Purchase
Agreement.
NOW,
THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:
1. The
Guaranty. Each Guarantor hereby guarantees, as a co-obligor
and not merely as surety, to the Holders, the prompt payment of all
Liabilities (including without limitation all costs and expenses,
principal, premium if any, and interest (including all interest
that accrues after the commencement of any proceeding under
Applicable Insolvency Laws of the Company or any Guarantor (the
Company and each Guarantor collectively referred to herein as the
“Note Parties”
and each individually, a “Note Party”) at the rate provided
in the respective Transaction Document (as such term is defined in
the December 2021 Securities Purchase Agreement), whether or not a
claim for post-petition interest is allowed in such proceeding
under Applicable Insolvency Laws) on the Notes, and all obligations
which, but for the automatic stay under 11 U.S.C. Section 362 (or
similar successor statute), would become due), whenever arising, in
full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise in accordance with any
Transaction Document) strictly in accordance with the terms thereof
(hereinafter, collectively, the “Guaranteed Obligations”). Each
Guarantor hereby further agrees that if any of the Guaranteed
Obligations are not paid in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration or otherwise
in accordance with any Transaction Document), such Guarantor will
promptly pay the same, without any demand or notice whatsoever, and
that in the case of any extension of time of payment or renewal of
any of the Guaranteed Obligations, the same will be promptly paid
in full when due (whether at extended maturity, as a mandatory
prepayment, by acceleration or otherwise in accordance with any
Transaction Document) in accordance with the terms of such
extension or renewal. This Guaranty is a guaranty of performance
and payment and not of collection. This Guaranty is a continuing
guaranty and shall apply to all Guaranteed Obligations whenever
arising.
2. Joint
and Several Liability.
(a) Each
of the Guarantors is accepting joint and several liability
hereunder in consideration of the financial accommodations to be
provided by the Holders under the Transaction Documents, for the
mutual benefit, directly and indirectly, of each of the Note
Parties and other Guarantors (if any) and in consideration of the
undertakings of each of the Guarantors to accept joint and several
liability for the obligations of each of the Note
Parties.
(b) Each
of the Guarantors jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a
co-obligor, joint and several liability with the other Guarantors
with respect to the payment and performance of all of the
Guaranteed Obligations, it being the intention of the parties
hereto that all the Guaranteed Obligations shall be the joint and
several obligations of the Guarantors without preferences or
distinction among them.
(c) If
and to the extent that any of the Note Parties or Guarantors shall
fail to make any payment with respect to any of the Guaranteed
Obligations as and when due or to perform any of the Guaranteed
Obligations in accordance with the terms thereof, then in each such
event, the other Guarantors will make such payment with respect to,
or perform, such Guaranteed Obligation.
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3. Obligations
Unconditional. The obligations of each of the Guarantors
under Section 1
hereof are irrevocable, absolute and unconditional, irrespective of
the value, genuineness, validity, regularity or enforceability of
any of the Transaction Documents, or any other agreement or
instrument referred to therein, or any substitution, release or
exchange of any other guaranty of or security for any of the
Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor other than payment in full of the
Guaranteed Obligations (other than contingent indemnification
obligations to the extent no claim giving rise thereto has been
asserted) and termination of the Purchase Agreements in accordance
with their terms, it being the intent of this Section 3 that the obligations
of each Guarantor hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that it
shall have no right of subrogation, indemnity, reimbursement or
contribution against any Note Party for amounts paid under this
Guaranty and no obligation hereunder can impaired by any
counterclaim, set-off, recoupment, deduction or defense based on
any claim a Guarantor may have, until the Guaranteed Obligations
are paid in full (other than contingent indemnification obligations
to the extent no claim giving rise thereto has been asserted) and
the Purchase Agreements have terminated in accordance with its
terms. Without limiting the generality of the foregoing, it is
agreed that, to the fullest extent permitted by applicable law, the
occurrence of any one or more of the following shall not alter or
impair the liability of any Guarantor hereunder which shall remain
absolute and unconditional as described above:
(a) at
any time or from time to time, without notice to any Guarantor, the
time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(b) any
of the acts mentioned in any of the provisions of any of the
Purchase Agreements, the Transaction Documents, or any other
agreement or instrument referred to in the Purchase Agreements or
the Transaction Documents shall be done or omitted;
(c) the
maturity of any of the Guaranteed Obligations shall be accelerated,
or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under any of
the Purchase Agreements, the Transaction Documents, or any other
agreement or instrument referred to in the Purchase Agreements or
the Transaction Documents shall be waived or any other guarantee of
any of the Guaranteed Obligations or any security therefor shall be
released or exchanged in whole or in part or otherwise dealt with,
in each case, in accordance with the Transaction Documents;
or
(d) any
of the Guaranteed Obligations shall be determined to be void or
voidable (including, without limitation, for the benefit of any
creditor of any Guarantor) or shall be subordinated to the claims
of any Person (including, without limitation, any creditor of any
Guarantor).
4. Reinstatement.
The obligations of each Guarantor under this Guaranty shall be
automatically reinstated if and to the extent that for any reason
any payment by or on behalf of any Person in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored
by any holder of any of the Guaranteed Obligations, whether as a
result of any proceedings in bankruptcy or reorganization or
otherwise, and each Guarantor agrees that it will indemnify each
Holder on demand for all reasonable out-of-pocket costs and
expenses (including, without limitation, reasonable fees and
out-of-pocket expenses of counsel) incurred by any Holder in
connection with such rescission or restoration, including any such
costs and expenses incurred in defending against any claim alleging
that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar
law.
5. Certain
Additional Waivers. With respect to its obligations
hereunder, each Guarantor hereby expressly waives diligence,
presentment, demand of payment, protest and all notices whatsoever,
to the extent permitted by applicable law, and any requirement that
any Holder exhaust any right, power or remedy or proceed against
any Person under any of the Purchase Agreements, the Transaction
Documents or any other agreement or instrument referred to in the
Purchase Agreements or the Transaction Documents, or against any
other Person under any other guarantee of, or security for, any of
the Guaranteed Obligations.
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6. Remedies.
Each Guarantor agrees that, to the fullest extent permitted by
applicable law, as between such Guarantor and the Holders, the
Guaranteed Obligations may be declared to be forthwith due and
payable for purposes of Section 1 hereof
notwithstanding any stay, injunction or other prohibition
preventing such declaration (or preventing the Guaranteed
Obligations from becoming automatically due and payable) as against
any other Person and that, in the event of such declaration (or the
Guaranteed Obligations being deemed to have become automatically
due and payable), the Guaranteed Obligations (whether or not due
and payable by any other Person) shall forthwith become due and
payable by the Guarantors for purposes of said Section 1.
7. Limitation
on Guaranteed Obligations. Notwithstanding any provision to
the contrary contained herein or in any other of the Transaction
Documents, the obligations of each Guarantor hereunder shall be
limited to an aggregate amount equal to the largest amount that
would not render its obligations hereunder subject to avoidance
under applicable law (whether federal or state and including,
without limitation, 11 U.S.C. Section 548 (or similar successor
statute)), after taking into account, among other things, such
Guarantor’s right of contribution and indemnification from
each other Guarantor under applicable law.
The
Guarantors hereby agree, as among themselves, that if any Guarantor
shall become an Excess Funding Company (as defined below), each
other Guarantor shall, on demand of such Excess Funding Company
(but subject to the next sentence hereof and to subsection (B)
below), pay to such Excess Funding Company an amount equal to such
Guarantor’s Pro Rata Share (as defined below and determined,
for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Company) of such
Excess Funding Company’s Excess Payment (as defined below).
The payment obligation of any Guarantor to any Excess Funding
Company under this Section
7 shall be subordinate and subject in right of payment to
the prior payment in full of the Guaranteed Obligations of such
Guarantor under the other provisions of this Guaranty, and such
Excess Funding Company shall not exercise any right or remedy with
respect to such excess until payment and satisfaction in full of
all of such Guaranteed Obligations. For purposes hereof, (i)
“Excess Funding
Company” means, in respect of any Guaranteed
Obligations arising under the other provisions of this Guaranty
(hereafter, the “Joint
Obligations”), a Guarantor that has paid an amount in
excess of its Pro Rata Share of the Joint Obligations; (ii)
“Excess Payment”
means, in respect of any Joint Obligations, the amount paid by an
Excess Funding Company in excess of its Pro Rata Share of such
Joint Obligations; and (iii) “Pro Rata Share”, for the purposes
of this Section 7,
means, for any Guarantor, the ratio (expressed as a percentage) of
(A) the amount by which the aggregate present fair salable value of
all of its assets and properties exceeds the amount of all debts
and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but
excluding the obligations of such Guarantor hereunder) to (B) the
amount by which the aggregate present fair salable value of all
assets and other properties of such Guarantor and all of the other
Note Parties exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of such Guarantor and
the other Note Parties hereunder) of such Guarantor and all of the
other Note Parties, all as of the Closing Date (if any Guarantor
becomes a party hereto subsequent to the Closing Date, then for the
purposes of this Section
7 such subsequent Guarantor shall be deemed to have been a
Guarantor as of the Closing Date and the information pertaining to,
and only pertaining to, such Guarantor as of the date such
Guarantor became a Guarantor shall be deemed true as of the Closing
Date).
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8. Representations.
(a) Each
Guarantor hereby represents and warrants that it is duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its formation or incorporation and in each other
jurisdiction in which the failure to be so qualified could
reasonably be expected to have a Material Adverse Effect (as such
term is defined in the December 2021 Securities Purchase
Agreement).
(b) Each
Guarantor further represents and warrants that it has the power and
authority to enter into this Guaranty and to perform its
obligations and to consummate the transactions contemplated hereby
and has by proper action duly authorized the execution and delivery
of this Guaranty.
(c) Each
Guarantor further represents and warrants that this Guaranty
constitutes the legal, valid and binding obligation of such
Guarantor enforceable in accordance with its terms, subject to
bankruptcy laws and other similar laws of general application
affecting rights of creditors and subject to the application of the
rules of equity, including those respecting the availability of
specific performance.
(d) Each
Guarantor further represents and warrants that it has knowledge of
the other Note Parties’ financial condition and affairs and
represents and agrees that it will keep so informed while this
Guaranty is in force. Each Guarantor agrees that no Holder will
have any obligation to investigate the financial condition or
affairs of the other Note Parties for the benefit of such Guarantor
nor to advise such Guarantor of any fact respecting, or any change
in, the financial condition or affairs of the other Note Parties
which might come to the knowledge of the Holders at any time,
whether or not any Holder knows or believes or has reason to know
or believe that any such fact or change is unknown to such
Guarantor or might (or does) materially increase the risk of such
Guarantor as a guarantor or might (or would) affect the willingness
of such Guarantor to continue as a guarantor with respect to the
Guaranteed Obligations.
9. Incorporated
Provisions. Each Guarantor acknowledges, agrees to, and
agrees to perform, as applicable, all of the representations,
warranties, covenants, waivers and other provisions pertaining to
it as a Guarantor or Subsidiary contained in any Transaction
Document.
10. Amendment.
This Guaranty may be amended or modified only in a writing executed
by the parties hereto.
11. Termination.
This Guaranty shall terminate automatically upon the indefeasible
payment in full in cash of the Guaranteed Obligations. Upon the
sale, transfer, conveyance or other disposition of all of the
equity interests of any Guarantor in a transaction permitted
pursuant to the Transaction Documents (other than to a Note Party)
and the application of the proceeds thereof as provided in the
Transaction Documents, such Guarantor shall cease to be a
“Guarantor” for purposes of the Transaction Documents
and shall be released from its obligations hereunder.
12. Counterparts.
This Guaranty may be executed in any number of counterparts, each
of which where so executed and delivered shall be an original, but
all of which shall constitute one and the same instrument. It shall
not be necessary in making proof of this Guaranty to produce or
account for more than one such counterpart. Facsimile or electronic
transmissions of any executed original document and/or
retransmission of any executed facsimile or electronic transmission
shall be deemed to be the same as the delivery of an executed
original. At the request of any party hereto, the other parties
hereto shall confirm such transmissions by executing duplicate
original documents and delivering the same to the requesting party
or parties.
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13. Headings.
The headings of the sections and subsections hereof are provided
for convenience only and shall not in any way affect the meaning,
construction or interpretation of any provision of this
Guaranty.
14. Governing
Law; Submission to Jurisdiction; Waiver of Jury Trial;
Notice THIS
GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH, AND ENFORCED
UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE THAT WOULD REQUIRE THE
APPLICATION OF THE LAW OF ANOTHER JURISDICTION. THE PROVISIONS OF
THE PURCHASE AGREEMENTS RELATING TO SUBMISSION TO JURISDICTION,
WAIVER OF JURY TRIAL AND VENUE ARE HEREBY INCORPORATED BY REFERENCE
HEREIN, MUTATIS MUTANDIS.
15. Entirety.
This Guaranty represents the entire agreement of the parties hereto
and thereto, and supersedes all prior agreements and
understandings, oral or written, if any, including any commitment
letters or correspondence relating to the transactions contemplated
herein.
16. Holder
Assigns. This Guaranty is intended for and shall inure to
the benefit of each and every person who shall from time to time be
or become the owner or holder of (or participant in) any of the
Guaranteed Obligations, and each and every reference herein to a
“Holder” shall include and refer to each and every
successor or assignee of a Holder, as applicable, at any time
holding or owning any part of or interest (or participation) in any
part of the Guaranteed Obligations. Each Holder shall be entitled to rely upon
and be the third party beneficiary of the provisions of this
Guaranty and shall be entitled to enforce the terms and provisions
hereof to the same extent as if such Holder were directly party
hereto. This Guaranty shall be transferable and negotiable by such
Persons only with the same force and effect, and to the same
extent, that the Guaranteed Obligations are transferable and
negotiable, it being understood and stipulated that upon assignment
or transfer by any Holder of any of the Guaranteed Obligations the
legal holder or owner of said Guaranteed Obligations (or a part
thereof or interest therein thus transferred or assigned by a
Holder) shall (except as otherwise stipulated by a Holder in its
assignment) have and may exercise all of the rights granted to the
Holders under this Guaranty to the extent of that part of or
interest in the Guaranteed Obligations thus assigned or transferred
to said person. Each Guarantor expressly waives notice of transfer
or assignment of the Guaranteed Obligations, or any part thereof,
or of the rights of the Holders hereunder. Failure to give notice
will not affect the liabilities of any Guarantor
hereunder.
[Signature
Page Follows]
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Each of
the parties hereto has caused a counterpart of this Guaranty to be
duly executed and delivered as of the date first above
written.
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GUARANTORS:
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TRANSWORLD
ENTERPRISES INC.
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By: /s/ Xxxxxx
Xxxxx
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Name: Xxxxxx
Xxxxx
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Title:
Interim CEO, Secretary & Treasurer
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CHARGE
INFRASTRUCTURE, INC.
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By: /s/
Xxxxxx
Xxx
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Name: Xxxxxx
Xxx
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Title:
CEO
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GETCHARGED, INC.
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By: /s/
Xxxxxx
Xxx
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Name: Xxxxxx
Xxx
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Title:
CEO
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CHARGE SERVICES, LLC
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By: /s/
Xxxxxx
Xxx
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Name: Xxxxxx
Xxx
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Title:
Manager
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CHARGE
COMMUNICATIONS INC.
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By: /s/
Xxxxx
Xxxxxx
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Name: Xxxxx
Xxxxxx
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Title:
CEO
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PTGI INTERNATIONAL CARRIER SERVICES, INC.
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By: /s/
Xxxxxx
Xxx
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Name:
Xxxxxx Xxx
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Title:
CEO
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Accepted
and agreed to as of the date first above written.
HOLDERS:
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MT. WHITNEY SECURITIES, LLC
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By:
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/s/ Xxxxxxxx
Xxxxxx
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Name:
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Xxxxxxxx Xxxxxx
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Title:
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Authorized Signatory
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ARENA ORIGINATING CO., LLC
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By:
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/s/ Xxxxxxxx
Xxxxxx
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Name:
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Xxxxxxxx Xxxxxx
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Title:
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Authorized Signatory
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ARENA SPECIAL OPPORTUNITIES FUND, LP
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By:
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/s/ Xxxxxxxx
Xxxxxx
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Name:
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Xxxxxxxx Xxxxxx
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Title:
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Authorized Signatory
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ARENA SPECIAL OPPORTUNITIES PARTNERS I, LP
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By:
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/s/ Xxxxxxxx
Xxxxxx
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Name:
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Xxxxxxxx Xxxxxx
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Title:
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Authorized Signatory
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ARENA STRUCTURED PRIVATE INVESTMENTS (CAYMAN), LLC
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By:
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/s/ Xxxxxxxx
Xxxxxx
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Name:
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Xxxxxxxx Xxxxxx
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Title:
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Authorized Signatory
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[Signature Page to Guaranty Agreement (Transworld)]
