THIS GUARANTY (this "Guaranty"), dated as of December 1, 2002, made by
COMPLIANCE SYSTEMS CORPORATION and CALL XXXXXXXXXX.XXX, INC., each a company
organized under the laws of Delaware (the "Guarantors"), in favor of Telmax Co.,
Inc., the "Lender"; Lender and any subsequent holder(s) of the Note (as defined
below) are hereinafter referred to collectively as "Lender").
WITNESSETH
WHEREAS, in March 1998, Lender made a loan ("Loan") in the principal
amount of $200,000 to ASN Voice and Data Corp., as evidenced by a promissory
note dated March 31, 1998 ("Original Note"), which was guaranteed by certain
parties ("Original Guarantors"); and
WHEREAS, in December 2001 the terms of the Loan were amended and the
Original Note was assigned to Call Compliance, Inc., a New York company
("Debtor"), as obligor; and
WHEREAS, in December 2002 the Lender agreed to restructure and amend the
terms of the Loan ("Restructured Loan"), as reflected in the Promissory Note
annexed hereto as Exhibit "A"; and
WHEREAS, the Guarantors have a direct interest in the financial affairs
and wellbeing of the Debtor, and will directly benefit from the Restructured
Loan; and
WHEREAS, the Guarantors have agreed to provide the Guaranty set forth
herein in substitution of the guaranty provided by the Original Guarantors,
which shall be terminated; and
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantors hereby agrees as follows:
SECTION 1. Guaranty.
(a) The Guarantors jointly and severally hereby unconditionally and
irrevocably (i) guarantee to the Lender the prompt and complete payment
when due (whether at stated maturity, by acceleration or otherwise) of all
payments of Debtor to Lender pursuant to the Note (the "Obligations"), and
(ii) agree to pay any and all expenses (including counsel fees and
expenses) incurred by the Lender in obtaining advice of counsel in respect
of this Guaranty and incurred by the Lender in enforcing any rights with
respect to, or collecting against the Guarantors under, this Guaranty.
171878GUARANTY
(b) The Guarantors hereby agree that all payments hereunder will be
paid to the Lender without setoff, deduction, recoupment, claim or
counterclaim in U.S. Dollars at a place designated by Lender and in
immediately available funds.
SECTION 2. GUARANTY ABSOLUTE. The Guarantors guarantee that the
Obligations will be paid strictly in accordance with the terms of the Note,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Lender with
respect thereto. The liability of the Guarantors under this Guaranty shall be
absolute and unconditional irrespective of:
(a) any lack of validity, regularity or enforceability of the Note
or any other agreement or instrument relating thereto;
(b) any lack of validity, regularity or enforceability of this
Guaranty or any other agreement or instrument relating hereto;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to departure from the Note;
(d) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure from any
other guaranty, for all or any of the Obligations;
(e) any failure on the part of the Lender to exercise, or any delay
in exercising, any right under the Note or any other document; or
(f) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Debtor, the Guarantors or any
other guarantor of all or a portion of the Obligations (including, without
limitation, all defenses based on suretyship or impairment of collateral,
and all defenses that the Debtor may assert to the repayment of the
Obligations, including, without limitation, failure of consideration,
breach of warranty, payment, statute of frauds, bankruptcy, lack of legal
capacity, statute of limitations, lender liability, accord and
satisfaction, and usury), this Guaranty and the Obligations of the
Guarantors under this Guaranty.
SECTION 3. Representations AND Warranties of the Guarantors. Each
Guarantor represents and warrants as follows:
(a) Enforceability. This Guaranty is the legal, valid and binding
obligation of each Guarantor, enforceable in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy, insolvency
or similar laws affecting creditors' rights generally and (ii) general
principles of equity.
SECTION 4. Waiver. Each Guarantor hereby waives (a) promptness, diligence,
notice of acceptance and any other notice with respect to any of the Obligations
or all other
171878GUARANTY
amounts payable pursuant to this Guaranty and (b) any requirement that the
Lender exhaust any right to take any action against the Debtor.
SECTION 5. GOVERNING LAW. THE VALIDiTY, INTERPRETATION AND ENFORCEMENT OF
THIS GUARANTY AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS
GUARANTY, WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS
OTHER THAN SECTION 5-140 1 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND
DECISIONS OF THE STATE OF NEW YORK.
SECTION 6. JURISDICTION AND SERVICE OF PROCESS. THE GUARANTORS HEREBY
CONSENT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK IN CONNECTION
WiTH ANY AND ALL ACTIONS COMMENCED WiTH RESPECT TO THIS GUARANTY AND FURTHER
CONSENT THAT ANY NOTICES, PROCESSES OR NOTICE OF MOTION OR OTHER APPLICATION TO
EiTHER OF SAID COURTS MAY BE SERVED IN OR OUT OF THE STATE OF NEW YORK BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE PROVIDED A
REASONABLE TIME FOR APPEARANCE IS ALLOWED OR SUCH OTHER MANNER AS IS ALLOWED BY
LAW.
SECTION 7. HEREOF, THE LENDER, PERMiTTED BY LAW ANY JURY TRIAL. THE
GUARANTORS AND, BY ITS RECEIPT EACH HEREBY WAWES TO THE FULLEST EXTENT RIGHT TO
A TRIAL BY JURY.
SECTION 8. No Waiver; Remedies; No Marshalling, APPLICATION OF PAYMENTS.
NO FAILURE ON THE part of the Lender to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The Guarantors hereby waive any
right to require the Lender to marshal any security or collateral or otherwise
compel the Lender to seek recourse against or satisfaction of the Obligations
and all other amounts payable pursuant to Section 1(a)(ii) from one source
before seeking recourse or satisfaction from another source. The Guarantors
acknowledge and agrees that the Lender shall be entitled to apply all payments
received from the Guarantors pursuant to the terms hereof to such portion of the
Obligations as the Lender may elect.
SECTION 9. Right of Setoff. In addition to and not in limitation of all
rights of offset that the Lender or its Affiliates may have under applicable
law, and whether or not the Lender has made any demand or the Obligations of the
Guarantors have matured, the Lender shall have the right to appropriate and
apply to the payment of the Obligations of the Guarantors all deposits and other
obligations then or thereafter owing by the Lender to the Guarantors.
SECTION 10. Amendments and Waivers. No amendment or waiver of any
provision of this Guaranty shall be effective unless in writing and signed by
the Lender and the
171878 2
Guarantors and any such amendment or waiver shall be effective only to the
extent set forth therein.
SECTION 11. Telecopied Signature. This Guaranty, and any notices to be
given pursuant to this Guaranty, may be executed and delivered by telecopier or
other facsimile transmission all with the same force and effect as if the same
was a fully executed and delivered original.
SECTION 12. Severability. In case any provision in or obligation under
this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
IN WITNESS WhEREOF, the Guarantors have executed this Guaranty as of the
date first set forth above.
COMPLIAN E STEMS CORPORATION
By:
CALL OMPL N .COM, INC.
By:
171878 3
NON-NEGOTIABLE
PROMISSORY NOTE
$242,000.00 DECEMBER 1, 2002
FOR VALUE RECEIVED, the undersigned, CALL COMPLIANCE, INC., a New York
corporation ("Maker"), promises to pay to the order of TELMAX CO., INC., a New
York corporation ("Payee"), at its office, Suite A, 000 Xxx Xxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxx 00000, or at such other place as Payee may designate to
Maker in writing from time to time, the principal amount of Two Hundred Forty
Two Thousand Dollars ($242,000.00), consisting of Two Hundred Thousand Dollars
($200,000.00) of principal indebtedness ("Base Principal") and Forty Two
Thousand Dollars ($42,000.00) reflecting deferred interest on the Prior Note, as
hereinafter defined ("Deferred Interest"), together with interest on the Base
Principal from the date hereof as follows.
This Note shall reflect the amended terms of in~ promissory note dated March 31,
1998 in the Thousand Dollars ($200,000.00), with AMS Netv and Automated Systems
Nationwide Network, Inc amended from time to time and assigned to the MaJ and
supercede the terms of such Prior Note.
Interest on the Base Principal shall be at the rate Rate") from the date hereof
through May 3 Commencing June 1, 2003 through May 31, 2008 the Base Principal
shall be at the rate of 18.0% per
During the five-year term commencing June 1, 20(1 and self liquidating monthly
installments of Six 1 Dollars and 70/100 ($6,128.70) consisting of ~ (ii)
interest on the Base Principal at the Initial In Period, (iii) Base Principal
and (iv) interest on the Rate during the Second Interest Period. The Mak this
Note on the last day of each month ("Payni IN~NFFIEIENT ANY IINN~ID ~MNIINTS
SHIDI HE ~iMed ~ 1
1711I7o 4
b. the filing of a petition in voluntary or involuntary
bankruptcy by or against Maker, the general assignment for the
benefit of creditors of Maker, or the appointment of a receiver or
trustee of any assets of Maker.
The Maker shall have the right to prepay this Note, at any time, in whole
or in part, without premium or penalty. Each partial prepayment shall be
applied first to Deferred Interest and thereafter to accrued interest, and
then to installments of current interest and Base Principal, in that
order, in the inverse order of their maturity.
A late charge on any payments due made more than five (5) days after the
Payment Date thereof shall be paid at the rate of one-half of one percent
(.5%) per month or portion thereof that said payment remains unpaid.
It is not intended hereby to charge interest at a rate in excess of the
maximum rate of interest permitted to be charged to Maker hereof under
applicable law, but if, notwithstanding, interest in excess of such
maximum legal rate shall be paid hereunder, the excess shall be retained
by Payee as cash collateral for the payment of the outstanding principal
amount and may be applied to pay same.
Maker hereby waives presentment for payment, demand, of non-payment and
dishonor, protest, of protest and any other that may be required under the
law in connection with enforcement of this Note.
if Maker fails to make timely the payments required hereby, Maker shall
pay all costs of collection when incurred, including, without limitation,
reasonable attorney's fees and expenses and court costs. Such costs will
be added to the balance due hereunder.
This Note may not be modified or the face hereof canceled except in a
writing, signed by Maker and by Payee. This Note shall be interpreted and
enforced in accordance with the laws of the State of New York without
regard to any principles of conflicts of law. The parties hereto hereby
consent to the jurisdiction of the Courts of the State of New York and of
the United States District Court for the Eastern District of New York in
connection with any and all actions commenced with respect to this Note
and further consent that any notice, process or notice of motion or other
application to either of said courts or judges thereof may be served in or
out of the State of New York by certified or registered mail return
receipt requested, or by personal service, provided a reasonable time for
appearance is allowed, or in such other manner as may be permitted by
either of said courts.
As used herein, the terms "Maker" and "Payee" shall be deemed to include
their respective successors, legal representatives and assigns, whether by
voluntary action of the parties or by operation of law.
CALL COMPLIANCE, INC.
1711I7o 4
By:
Name:
Title:
163735 VI 10497.401 2
