GUARANTY
This GUARANTY dated as of January __ 2003 (the "Guaranty"), is given by
iVOICE INC., a Delaware corporation ("Guarantor") in favor of the Buyer(s) (as
this term is defined in the Securities Purchase Agreement dated the date hereof
). Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement by and
between iVOICE ACQUISITION 1, Inc., a Delaware corporation, (the "Company"), and
the Buyer(s) dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "Securities Purchase Agreement").
WHEREAS:
A. The Company and the Buyer(s) wish to provide for the funding contemplated
under the Securities Purchase Agreement in the amount up to Two Hundred Fifty
Thousand Dollars ($250,000).
B. To induce the Buyer(s) to enter into the Securities Purchase Agreement, the
Guarantor has agreed to provide a full and unconditional guaranty of the payment
and performance obligations of the Company under the Securities Purchase
Agreement, Convertible Debenture, Registration Rights Agreement, Escrow
Agreement, and the Irrevocable Transfer Agent Instructions (the "Transaction
Documents").
C. The Guarantor is a Delaware of the Company and the Guarantor acknowledges
that without this Guaranty, the Buyer(s) would not be willing to enter into the
Securities Purchase Agreement.
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 Guarantor hereby agrees as
follows:
1. Guaranty.
1.1 Guaranty. The Guarantor, as direct obligor and not merely as a surety,
hereby unconditionally, absolutely, and irrevocably guarantees to the Buyer(s)
(i) the full and prompt performance and payment of all of the Company's
obligations under the Securities Purchase Agreement and the other Transaction
Documents, (collectively, the "Obligations") and (ii) if the Company should
default in the payment or performance of any of the Obligations, the Guarantor,
as direct obligor and not merely as a surety, shall forthwith pay or perform
such Obligations upon two (2) days written notice or demand by the Buyer(S) in
the manner and on the day required by this Guaranty and specifically the
Guarantor shall take an Advance, from the Equity Line of Credit with Cornell
Capital Partners, LP, on the day the Company defaults on its Obligations, in the
amount of Two Hundred Fifty Thousand Dollars ($250,000) in order to repay to the
Buyer(s) the Principal Amount plus Fifty Thousand Dollars ($50,000) within seven
(7) days from default by the Company. An Advance Notice and an estimate of the
shares of Common Stock which shall be issued there under has been issued to
Cornell Capital Partners, LP and held in escrow pending a default by the
Company. In the event of a default the Advance Notice and the shares of Common
Stock will be release from escrow by Cornell Capital Partners, LP.
1.2 Continuing Guaranty. The Guarantor agrees that the 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 Discharge. The Guarantor covenants and agrees that this Guaranty will
not be discharged, except by complete performance of the obligations contained
herein. Notwithstanding anything to the contrary herein, so long as the
outstanding Principal Amount is zero 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
Buyer(s).
1.4 Representations and Warranties. The Guarantor hereby represents and
warrants to the Buyer(s) 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 Guarantor of this Guaranty and the consummation by the
Guarantor of the transactions contemplated hereby. Neither the execution and
delivery of this Guaranty by the Guarantor nor the performance by it 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 the Guarantor or
his properties, or conflict with or cause an event of default under any contract
or agreement of the 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.
1.5 Full Rights of Subrogation. The Guarantor shall be entitled to full
rights of subrogation under this Guaranty.
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:
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If to Guarantor: iVoice, Inc.
000 Xxxxxxx 00
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With Copy to: XxXxxxxx & English, LLP
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Attention: Xxxxxxx Xxxxxx, Esq.
Telephone: (305) 000- 0000
Facsimile: (000) 000-0000
If to the Investor: C/O The May Xxxxx Group Inc.
C/O National Security
000 Xxxxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
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 Severability. The unenforceability or invalidity of any provision of
this Guaranty shall not affect the enforceability or validity of any other
provision.
2.3 Indulgence. Failure of party to exercise any right or remedy under
this Guaranty or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
2.4 Modification. The terms of this Guaranty may be changed, waived,
discharged or terminated only by a written instrument executed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.
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.
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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 either the Guarantor or the
Buyer(s).
2.7 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.
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 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 after notice or demand by
the Buyer(s) in the manner and on the day requested by the Buyer(s); 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 the
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.
2.11 Governing Law; Jurisdiction; Jury Trial. This Agreement shall be
governed by and interpreted in accordance with the laws of the State of Delaware
without regard to the principles of conflict of laws. The parties further agree
that any action between them shall be heard in Xxxxxx County, New Jersey, and
expressly consent to the jurisdiction and venue of the Superior Court of New
Jersey, sitting in Xxxxxx County and the United States District Court for the
District of New Jersey sitting in Newark, New Jersey for the adjudication of any
civil action asserted pursuant to this Paragraph.
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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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be signed as
of the date first written above.
GUARANTOR:
iVOICE INC.
By:
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Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
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