AGREEMENT OF ACCORD AND SATISFACTION
This AGREEMENT OF ACCORD AND SATISFACTION (this "Agreement") is made and
executed effective as of January 29, 2004 (the "Effective Date"), by and between
SEQUIAM CORPORATION, a California corporation ("Sequiam"), and LA JOLLA COVE
INVESTORS, INC., a California corporation ("Investor"), with reference to the
following recitals:
A. Sequiam and Investor are parties to that certain Securities Purchase
Agreement, dated March 5, 2003 (the "SPA"), pursuant to which Sequiam made and
issued to Investor that certain 8% Convertible Debenture in the principal amount
of $300,000, dated March 5, 2003 (as amended, the "Debenture"), and that certain
Warrant to Purchase Common Stock ~ Conversion Warrants, dated March 5, 2003 (as
amended, the "Warrant").
B. Pursuant to the SPA, Sequiam and Investor entered into that certain
Registration Rights Agreement, dated March 5, 2003 (the "Registration
Agreement"), pursuant to which Sequiam agreed to register the common stock to be
issued to Investor upon conversion of the Debenture and exercise of the Warrant.
C. Xxxxxxxx X. XxxxxxXxxxxx ("VandenBrekel") and Xxxx Xxxxxxxxxxx
("Xxxxxxxxxxx") are officers and directors of Sequiam and, pursuant to the SPA,
entered into that certain Put and Call Agreement with Investor, dated March 5,
2003 (as amended, the "Put").
D. Sequiam and Investor desire to provide for the full satisfaction and
accord of the Debenture, cancellation of the Warrant, termination of the
Registration Agreement, and termination of the Put, in accordance with the terms
and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set
forth in the Agreement, and other good and valuable consideration, Sequiam and
Investor hereby agree as follows:
1. Accord and Satisfaction. Simultaneously with the execution and
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delivery of this Agreement, Sequiam shall deliver to Investor a promissory note
in the principal amount of Two Hundred Thousand Dollars ($200,000), with
interest at seven percent (7%) per annum, with principal payable in six equal
monthly installments, plus interest, beginning on February 1, 2004 and on the
first day of each of the following five months, in the form attached hereto as
Exhibit "A" (the "Note"). The Note shall be personally guaranteed by
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VandenBrekel and Xxxxxxxxxxx in the form of the guaranty attached hereto as
Exhibit "B" (the "Guaranty"). Investor hereby agrees to accept the Note and
Guaranty, in accord and satisfaction of the total amount due under the
Debenture.
2. Warrant and Registration Agreement. The Warrant and Registration
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Agreement are hereby terminated, and neither party shall have any further
rights or obligations under the Warrant or Registration Agreement.
3. Put. The Put is hereby terminated, and neither party shall have any
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further rights or obligations under the Put, provided however, that the Put
shall be reinstated and be in full force and effect if there is a default under
the Note.
4. Restricted Stock. Simultaneously with the execution and delivery of
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this Agreement, Sequiam shall issue and deliver to Investor one hundred thousand
(100,000) shares of restricted Sequiam common stock (the "Securities"). If (but
without any obligation to do so) Sequiam proposes to register any of its stock
or other securities under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), in connection with the public offering of such securities,
Sequiam shall cause to be registered under the
Securities Act all of the shares that Investor holds. If the Securities are
registered, Sequiam shall give Investor written notice of the effectiveness of
the registration within ten (10) days thereof.
5. Investor's Representations and Warranties. Investor hereby
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represents and warrants to and covenants and agrees with Sequiam as follows:
a. Investor is purchasing the Securities for its own account, for
investment purposes only and not with a view towards or in connection with the
public sale or distribution thereof in violation of the Securities Act.
b. Investor is and shall remain at all times until issuance of all
of the Securities (i) an "accredited investor" within the meaning of Rule 501 of
Regulation D under the Securities Act, (ii) experienced in making investments of
the kind contemplated by this Agreement, (iii) capable, by reason of its
business and financial experience, of evaluating the relative merits and risks
of an investment in the Securities, and (iv) able to afford the loss of its
investment in the Securities.
c. Investor understands that the Securities are being offered and
sold by the Company in reliance on an exemption from the registration
requirements of the Securities Act as set forth in Rule 506 of Regulation D
promulgated by the Securities and Exchange Commission (the "Commission") and
equivalent state securities and "blue sky" laws, and that the Company is relying
upon the accuracy of, and Investor's compliance with, Investor's
representations, warranties and covenants set forth in this Agreement to
determine the availability of such exemption and the eligibility of Investor to
purchase the Securities.
d. Investor understands that the Securities have not been approved
or disapproved by the Commission or any state or provincial securities
commission.
e. This Agreement has been duly and validly authorized, executed
and delivered by Investor and is a valid and binding agreement of Investor
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and except as
rights to indemnity and contribution may be limited by federal or state
securities laws or the public policy underlying such laws.
6. Sequiam's Representations and Warranties. Sequiam hereby represents
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and warrants to and covenants and agrees with Investor as follows:
CAPITALIZATION
a. The authorized capital stock of Sequiam consists of 100,000,000
shares of common stock and 50,000,000 shares of Series A Preferred Stock of
which 44,350,141 shares and 0 shares, respectively, are issued and outstanding
as of the date hereof and are fully paid and nonassessable. The amount,
exercise, conversion or subscription price and expiration date for each
outstanding option and other security or agreement to purchase shares of common
stock is accurately set forth on Schedule 6.
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b. The Securities have been duly and validly authorized and
reserved for issuance by Sequiam, and, when issued by Sequiam, will be duly and
validly issued, fully paid and nonassessable and will not subject the holder
thereof to personal liability by reason of being such holder.
c. Except as disclosed on Schedule 6, there are no preemptive,
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subscription, "call," right of first refusal or other similar rights to acquire
any capital stock of Sequiam or other voting securities of Sequiam that have
been issued or granted to any person and no other obligations of Sequiam
is to issue, grant, extend or enter into any security, option, warrant, "call,"
right, commitment, agreement, arrangement or undertaking with respect to any of
their respective capital stock.
ORGANIZATION; REPORTING COMPANY STATUS.
d. Sequiam is a corporation duly organized, validly existing and
in good standing under the laws of the state or jurisdiction in which it is
incorporated and is duly qualified as a foreign corporation in all jurisdictions
in which the failure so to qualify would reasonably be expected to have a
material adverse effect on the business, properties, prospects, condition
(financial or otherwise) or results of operations of Sequiam or on the
consummation of any of the transactions contemplated by this Agreement (a
"MATERIAL ADVERSE EFFECT").
e. Sequiam is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"). The common
stock is traded on the OTC Bulletin Board service of the National Association of
Securities Dealers, Inc. ("OTCBB") and Sequiam has not received any notice
regarding, and to its knowledge there is no threat of, the termination or
discontinuance of the eligibility of the common stock for such trading.
AUTHORIZATION.
f. Sequiam has duly and validly authorized and reserved for
issuance the Securities. Sequiam understands and acknowledges the potentially
dilutive effect on the common stock of the issuance of the Securities. Sequiam
further acknowledges that its obligation to issue the Securities is absolute and
unconditional regardless of the dilutive effect that such issuance may have on
the ownership interests of other stockholders of Sequiam and notwithstanding the
commencement of any case under 11 U.S.C. Sec. 101 et seq. (the "BANKRUPTCY
-- ---
CODE"). In the event Sequiam is a debtor under the Bankruptcy Code, Sequiam
hereby waives to the fullest extent permitted any rights to relief it may have
under 11 U.S.C. Sec. 362 in respect of the issuance of the Securities. Sequiam
agrees, without cost or expense to Investor, to take or consent to any and all
action necessary to effectuate relief under 11 U.S.C. Sec. 362.
AUTHORITY; VALIDITY AND ENFORCEABILITY.
g. Sequiam has the requisite corporate power and authority to
enter into this Agreement and the Note (collectively, the "Documents") and to
perform all of its obligations hereunder and thereunder (including the issuance,
sale and delivery to Investor of the Securities). The execution, delivery and
performance by Sequiam of the Documents and the consummation by Sequiam of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance and reservation for issuance of the Securities) have been duly and
validly authorized by all necessary corporate action on the part of Sequiam.
Each of the Documents has been duly and validly executed and delivered by
Sequiam and each Document constitutes a valid and binding obligation of Sequiam
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and except as
rights to indemnity and contribution may be limited by federal or state
securities laws or the public policy underlying such laws. The Securities have
been duly and validly authorized for issuance by Sequiam and, when executed and
delivered by Sequiam, will be valid and binding obligations of Sequiam
enforceable against it in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally.
VALIDITY OF ISSUANCE OF THE SECURITIES.
h. Upon issuance, the Securities will be validly issued and
outstanding, fully paid and nonassessable, and not subject to any preemptive
rights, rights of first refusal, tag-along rights, drag-along rights or other
similar rights.
NON-CONTRAVENTION.
i. The execution and delivery by Sequiam of the Documents, the
issuance of the Securities, and the consummation by Sequiam of the other
transactions contemplated hereby and thereby do not, and compliance with the
provisions of this Agreement and other Documents will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a material benefit under, or result in
the creation of any Lien (as such term is hereinafter defined) upon any of the
properties or assets of Sequiam or any of its subsidiaries under, or result in
the termination of, or require that any consent be obtained or any notice be
given with respect to (i) the Articles or Certificate of Incorporation or
By-Laws of Sequiam or the comparable charter or organizational documents of any
of its subsidiaries, in each case as amended to the date of this Agreement, (ii)
any loan or credit agreement, note, bond, mortgage, indenture, lease, contract
or other agreement, instrument or permit applicable to Sequiam or any of its
subsidiaries or their respective properties or assets or (iii) any judgment,
decree or order of any court or government body having jurisdiction over,
Sequiam or any of its subsidiaries or any of their respective properties or
assets.
APPROVALS.
j. No authorization, approval or consent of any court or public or
governmental authority is required to be obtained by Sequiam for the issuance
and sale of the Securities to Investor as contemplated by this Agreement, except
such authorizations, approvals and consents as have been obtained by Sequiam
prior to the date hereof.
COMMISSION FILINGS.
k. Sequiam has properly and timely filed with the Commission all
reports, proxy statements, forms and other documents required to be filed with
the Commission under the Securities Act and the Exchange Act since becoming
subject to such Acts (the "COMMISSION FILINGS"). As of their respective dates,
(i) the Commission Filings complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations of the Commission promulgated thereunder applicable to
such Commission Filings and (ii) none of the Commission Filings contained at the
time of its filing any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of Sequiam included in the Commission
Filings, as of the dates of such documents, were true and complete in all
material respects and complied with applicable accounting requirements and the
published rules and regulations of the Commission with respect thereto, were
prepared in accordance with generally accepted accounting principles in the
United States ("GAAP") (except in the case of unaudited statements permitted by
Form 10-Q under the Exchange Act) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
presented the consolidated financial position of Sequiam and its subsidiaries as
of the dates thereof and the consolidated results of their operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments that in the aggregate are not material and
to any other adjustment described therein).
FULL DISCLOSURE.
l. There is no fact known to Sequiam (other than general economic
or industry conditions known to the public generally) that has not been fully
disclosed in the Commission Filings that (i) reasonably could be expected to
have a Material Adverse Effect or (ii) reasonably could be expected to
materially and adversely affect the ability of Sequiam to performing its
obligations pursuant to the Documents.
ABSENCE OF EVENTS OF DEFAULT.
m. No "Event of Default" (as defined in any agreement or
instrument to which Sequiam is a party) and no event which, with notice, lapse
of time or both, would constitute an Event of Default (as so defined), has
occurred and is continuing.
SECURITIES LAW MATTERS.
n. Sequiam shall not directly or indirectly take, and shall not
permit any of its directors, officers or Affiliates directly or indirectly to
take, any action (including, without limitation, any offering or sale to any
person or entity of any security similar to the Securities) which will make
unavailable the exemption from Securities Act registration being relied upon by
Sequiam for the offer and sale to Investor of the Securities as contemplated by
this Agreement. No form of general solicitation or advertising has been used or
authorized by Sequiam or any of its officers, directors or Affiliates in
connection with the offer or sale of the Securities as contemplated by this
Agreement or any other agreement to which Sequiam is a party.
REGISTRATION RIGHTS.
o. Except as set forth on Schedule 6, no Person has any demand,
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"piggy-back" or other rights to cause Sequiam to file any registration statement
under the Securities Act relating to any of its securities or to participate in
any such registration statement.
INTEREST.
p. The timely payment of interest on the Note is not prohibited by
the Articles or Certificate of Incorporation or By-Laws of Sequiam, in each case
as amended to the date of this Agreement, or any agreement, contract, document
or other undertaking to which Sequiam is a party.
NO MISREPRESENTATION.
q. No representation or warranty of Sequiam contained in this
Agreement or any of the other Documents, any schedule, annex or exhibit hereto
or thereto or any agreement, instrument or certificate furnished by Sequiam to
Investor pursuant to this Agreement contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
FINDER'S FEE.
r. There is no finder's fee, brokerage commission or like payment
in connection with the transactions contemplated by this Agreement for which
Investor is liable or responsible.
7. Certain Covenants And Acknowledgments.
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FILINGS.
a. Sequiam shall make all necessary Commission Filings and "blue
sky" filings required by Rule 506 of Regulation D to be made by Sequiam in
connection with the sale of the Securities to Investor as required by all
applicable Laws, and shall provide a copy thereof to Investor promptly after
such filing. The foregoing shall not require Sequiam to register the sale of any
of the Securities under the Securities Act or any other law.
REPORTING STATUS.
b. So long as Investor beneficially owns any of the Securities,
Sequiam shall timely file all reports required to be filed by it with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act.
LISTING.
c. Except to the extent Sequiam lists its common stock on The New
York Stock Exchange, The American Stock Exchange or The Nasdaq Stock Market or
any similar national stock exchange, Sequiam shall use its best efforts to
maintain its listing of the common stock on OTCBB. If the common stock is
delisted from OTCBB, Sequiam will use its best efforts to list the common stock
on the most liquid national securities exchange or quotation system that the
common stock is qualified to be listed on.
INFORMATION.
d. Each of the parties hereto acknowledges and agrees that
Investor shall not be provided with, nor be given access to, any material
non-public information relating to Sequiam.
ACCOUNTING AND RESERVES.
e. Sequiam shall maintain a standard and uniform system of
accounting and shall keep proper books and records and accounts in which full,
true, and correct entries shall be made of its transactions, all in accordance
with GAAP applied on consistent basis through all periods, and shall set aside
on such books for each fiscal year all such reserves for depreciation,
obsolescence, amortization, bad debts and other purposes in connection with its
operations as are required by such principles so applied.
CERTAIN RESTRICTIONS.
f. So long as the Securities are outstanding, no dividends shall
be declared or paid or set apart for payment nor shall any other distribution be
declared or made upon any capital stock of Sequiam, nor shall any capital stock
of Sequiam be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of shares of common stock made for
purposes of an employee incentive or benefit plan (including a stock option
plan) of Sequiam for any consideration by Sequiam, directly or indirectly, nor
shall any moneys be paid to or made available for a sinking fund for the
redemption of any common stock of any such stock.
SHORT SELLING.
g. So long as the Securities are held by Investor, Investor agrees
and covenants on its behalf and on behalf of its affiliates that neither
Investor nor its affiliates shall at any time engage in
any short sales with respect to Sequiam's common stock, or sell put options or
similar instruments with respect to Sequiam's common stock.
8. Survival; Indemnification.
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a. The representations, warranties and covenants made by each of
Sequiam and Investor in this Agreement, the annexes, schedules and exhibits
hereto and in each instrument, agreement and certificate entered into and
delivered by them pursuant to this Agreement shall survive the closing and the
consummation of the transactions contemplated hereby. In the event of a breach
or violation of any of such representations, warranties or covenants, the party
to whom such representations, warranties or covenants have been made shall have
all rights and remedies for such breach or violation available to it under the
provisions of this Agreement or otherwise, whether at law or in equity,
irrespective of any investigation made by or on behalf of such party on or prior
to the closing.
b. Sequiam hereby agrees to indemnify and hold harmless Investor,
its affiliates and their respective officers, directors, partners and members
(collectively, the "INVESTOR INDEMNITEES") from and against any and all losses,
claims, damages, judgments, penalties, liabilities and deficiencies
(collectively, "LOSSES") and agrees to reimburse Investor Indemnitees for all
out-of-pocket expenses (including the fees and expenses of legal counsel), in
each case promptly as incurred by Investor Indemnitees and to the extent arising
out of or in connection with:
i. any material misrepresentation, or breach of any of
Sequiam's representations or warranties contained in this Agreement or the other
Documents, or the annexes, schedules or exhibits hereto or thereto or any
instrument, agreement or certificate entered into or delivered by Sequiam
pursuant to this Agreement or the other Documents;
ii. any failure by Sequiam to perform any of its covenants,
agreements, undertakings or obligations set forth in this Agreement or the other
Documents or any instrument, certificate or agreement entered into or delivered
by Sequiam pursuant to this Agreement or the other Documents;
c. Investor hereby agrees to indemnify and hold harmless Sequiam,
its Affiliates and their respective officers, directors, partners and members
(collectively, the "COMPANY INDEMNITEES") from and against any and all Losses,
and agrees to reimburse Sequiam Indemnitees for all out-of-pocket expenses
(including the fees and expenses of legal counsel), in each case promptly as
incurred by Sequiam Indemnitees and to the extent arising out of or in
connection with:
i. any misrepresentation, omission of fact or breach of any
of Investor's representations or warranties contained in this Agreement or the
other Documents, or the annexes, schedules or exhibits hereto or thereto or any
instrument, agreement or certificate entered into or delivered by Investor
pursuant to this Agreement or the other Documents; or
ii. any failure by Investor to perform in any material
respect any of its covenants, agreements, undertakings or obligations set forth
in this Agreement or the other Documents or any instrument, certificate or
agreement entered into or delivered by Investor pursuant to this Agreement or
the other Documents.
Promptly after receipt by either party hereto seeking indemnification pursuant
to this Section 8 (an "INDEMNIFIED PARTY") of written notice of any
investigation, claim, proceeding or other action in respect of which
indemnification is being sought (each, a "CLAIM"), the Indemnified Party
promptly shall notify the party against whom indemnification pursuant to this
Section 8 is being sought (the "INDEMNIFYING PARTY") of the commencement
thereof, but the omission so to notify the Indemnifying Party shall not
relieve it from any liability that it otherwise may have to the Indemnified
Party except to the extent that the Indemnifying Party is materially prejudiced
and forfeits substantive rights or defenses by reason of such failure. In
connection with any Claim as to which both the Indemnifying Party and the
Indemnified Party are parties, the Indemnifying Party shall be entitled to
assume the defense thereof. Notwithstanding the assumption of the defense of any
Claim by the Indemnifying Party, the Indemnified Party shall have the right to
employ separate legal counsel and to participate in the defense of such Claim,
and the Indemnifying Party shall bear the reasonable fees, out-of-pocket costs
and expenses of such separate legal counsel to the Indemnified Party if (and
only if): (x) the Indemnifying Party shall have agreed to pay such fees,
out-of-pocket costs and expenses, (y) the Indemnified Party and the Indemnifying
Party reasonably shall have concluded that representation of the Indemnified
Party and the Indemnifying Party by the same legal counsel would not be
appropriate due to actual or, as reasonably determined by legal counsel to the
Indemnified Party, potentially differing interests between such parties in the
conduct of the defense of such Claim, or if there may be legal defenses
available to the Indemnified Party that are in addition to or disparate from
those available to the Indemnifying Party or (z) the Indemnifying Party shall
have failed to employ legal counsel reasonably satisfactory to the Indemnified
Party within a reasonable period of time after notice of the commencement of
such Claim. If the Indemnified Party employs separate legal counsel in
circumstances other than as described in clauses (x), (y) or (z) above, the
fees, costs and expenses of such legal counsel shall be borne exclusively by the
Indemnified Party. Except as provided above, the Indemnifying Party shall not,
in connection with any Claim in the same jurisdiction, be liable for the fees
and expenses of more than one firm of legal counsel for the Indemnified Party
(together with appropriate local counsel). The Indemnifying Party shall not,
without the prior written consent of the Indemnified Party (which consent shall
not unreasonably be withheld), settle or compromise any Claim or consent to the
entry of any judgment that does not include an unconditional release of the
Indemnified Party from all liabilities with respect to such Claim or judgment.
In the event one party hereunder should have a claim for indemnification that
does not involve a claim or demand being asserted by a third party, the
Indemnified Party promptly shall deliver notice of such claim to the
Indemnifying Party. If the Indemnified Party disputes the claim, such dispute
shall be resolved by mutual agreement of the Indemnified Party and the
Indemnifying Party or by binding arbitration conducted in accordance with the
procedures and rules of the American Arbitration Association. Judgment upon any
award rendered by any arbitrators may be entered in any court having competent
jurisdiction thereof.
9. General. This Agreement shall be governed by and construed in
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accordance with the laws of the State of California applicable to agreements
made and to be performed entirely in such state. With respect to any suit,
action or proceedings relating to this Agreement, the Company irrevocably
submits to the exclusive jusrisdiction of the courts of the State of California
sitting in San Diego and the United States District Court located in the City of
San Diego and hereby waives, to the fullest extent permitted by applicable law,
any claim that any such suit, action or proceeding has been brought in an
inconvenient forum. Any provision of this Agreement that may be determined by
competent authority to be illegal, invalid, prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such illegality, invalidity, prohibition or unenforceability without
invalidating the remaining terms and provisions hereof, and any such illegality,
invalidity, prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable any terms and provisions hereof in any other
jurisdiction. Notwithstanding any other provision of this Agreement to the
contrary, in the event of any mediation, arbitration, administrative proceeding
or judicial proceeding to enforce or interpret this Agreement, the prevailing
party shall be entitled to recover from the non-prevailing party the reasonable
attorneys' fees, expert witness fees, and costs actually incurred by the
prevailing party in such proceeding. No alteration, change or modification of
or to this Agreement shall be effective unless it is made in writing and signed
on behalf of each party to be charged. This Agreement contains the entire
understanding between the parties with regard to the subject matter hereof and
all other agreements,
understandings, representations and statements between the parties regarding
such subject matter are superseded by this Agreement and shall be of no further
force or effect. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same document. Executed signature pages from separate
counterpart originals may be attached to a single counterpart copy.
[signatures begin on next page]
IN WITNESS WHEREOF, Sequiam and Investor have made, executed and delivered this
Agreement as of the Effective Date hereof.
"SEQUIAM" "INVESTOR"
SEQUIAM CORPORATION, LA JOLLA COVE INVESTORS, INC.,
a California corporation a California corporation
By: /s/ Xxxxxxxx XxxxxxXxxxxx By: /s/ Xxxxxx Xxxx
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Xxxxxxxx XxxxxxXxxxxx, President Print name: Xxxxxx Xxxx
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& Chief Executive Officer Its: Portfolio MGR
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Exhibits
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Exhibit "A" - Note
Exhibit "B" - Guaranty
