Exhibit 10.8
GUARANTY
This GUARANTY dated as of November __, 2005 (the "GUARANTY"), is given,
by ENCLAVES GROUP, INC., a Delaware corporation (the "GUARANTOR"), in favor of
CORNELL CAPITAL PARTNERS, LP, XXXXXXXXXX EQUITY PARTNERS, LTD. and HIGHGATE
HOUSE FUNDS, LTD. (collectively, the "INVESTORS"). Capitalized terms used herein
and not otherwise defined herein shall have the respective meanings set forth in
those Amended and Restated Convertible Debentures dated May 16, 2005, which
obligations have been assumed pursuant to that certain Assignment and Assumption
Agreement of even date herewith (the "Assumption Agreement") given by ENCLAVES
GROUP, INC. (f/k/a Alliance Towers, Inc.), a Delaware corporation (the
"COMPANY") to Guarantor, which obligations are held by the Investors, as such
obligations are amended, restated, supplemented or otherwise modified from time
to time, individually a "CONVERTIBLE DEBENTURE" and collectively the
"CONVERTIBLE DEBENTURES."
WHEREAS:
A. To induce the Investors to acknowledge and accept the
transfer, assignment, and assumption of the Transaction Documents and other
Purchased Assets from the Guarantor to the Company, subject to the lien of the
Convertible Debentures and other Investor Liabilities, as referenced in the
Assumption Agreement, the Guarantor has agreed to provide this guaranty of the
payment and performance obligations of the Company under the Convertible
Debentures, the Securities Purchase Agreement dated December 28, 2004, the
Amended and Restated Investor Registration Rights Agreement, the Irrevocable
Transfer Agent Instructions, the Security Agreement, and related Transaction
Documents all as in effect on the date herewith.
B. The Guarantor is an affiliate of the Company and the Guarantor
acknowledges that without this Guaranty the Investors would not be willing to
accept the Convertible Debentures as obligations of the Company.
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 the Investors (i)
that the Company shall repay to the Investors the principal amount plus accrued
interest within the period of time provided in the Convertible Debentures, and
all other amounts due to the Investors under the Convertible Debentures,
including, without limitation, all reasonable fees and costs incurred by the
Investors in collecting or securing or attempting to collect or secure the
Convertible Debentures, 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 Convertible Debentures 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 the Investors 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 Convertible Debentures, the Guarantor shall be solely responsible for the
payment of a maximum of $5,500,000 in principal plus interest.
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 the Investors, its successors, endorsees or assigns. The Investors
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 The Investors 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 the Investors.
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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 the Investors in collecting or securing or
attempting to collect or secure this Guaranty or the Convertible Debenture,
including, without limitation, reasonable attorneys' fees and expenses, whether
or not involving litigation and/or appellate or bankruptcy proceedings.
1.6 REPRESENTATIONS AND WARRANTIES. The Guarantor hereby
represents and warrants to the Investors 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: Enclaves Group, Inc.
00 Xxxxxxxxx Xxxx, Xxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With Copies to: Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx &
Wolosky LLP
Park Avenue Tower
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00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Investors: Cornell Capital Partners, LP, Xxxxxxxxxx Equity
Partners, Ltd. and Highgate House Funds, Ltd.
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: Xxxx Xxxxx, 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.
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
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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 Convertible
Debenture 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 the Investors 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 the
Investors, and the Investors shall be entitled to seek and institute any and all
remedies available to it. No remedy conferred under this Guaranty upon the
Investors are intended to be exclusive of any other remedy available to the
Investors, pursuant to the terms of this Guaranty or otherwise. No single or
partial exercise by the Investors of any right, power or remedy hereunder shall
preclude any other or further exercise thereof. The failure of the Investors 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 Investor's remedies provided in this Guaranty shall be cumulative and in
addition to all other remedies available to the Investors 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 Investors contained herein
shall be deemed a waiver of compliance with the provisions giving rise to such
remedy and nothing herein shall limit the Investor'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 the Investors. The Guarantor
acknowledges that a breach by the Guarantor of its obligations hereunder will
cause irreparable harm to the Investors 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, the Investors 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 THE
INVESTORS TO LOAN TO THE COMPANY THE MONIES UNDER THE CONVERTIBLE DEBENTURE 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.
ENCLAVES GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx, President & CEO
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