EXHIBIT 10.4
GUARANTY
GUARANTY, dated August 22, 2005 (this "Guaranty"), made by Xxxxxx
Xxxxxx, an individual residing in the State of New Jersey ("Guarantor"), in
favor of EasyLink Services Corporation, a Delaware corporation (the "Holder").
Capitalized terms used but not defined herein have the meanings given to such
terms in the Note, Amendment No. 1 or the Agreement, as applicable, referred to
below.
WHEREAS, the Holder, the Buyer and Xxxxxx Xxxxxx have entered into
Amendment No. 1 (hereinafter, "Amendment No. 1") as of the date hereof to the
Domain Portfolio Purchase Agreement made the 23rd day of December, 2004 (the
"Agreement");
WHEREAS, pursuant to Amendment No. 1, the Buyer has issued to the
Holder a promissory note in the original principal amount of US$1,130,000 (the
"Note");
WHEREAS, the Note is secured by a Security Agreement dated as of the
date of hereof; and
WHEREAS, it is a condition precedent to the termination pursuant to
Amendment No. 1 of certain rights and obligations under the Agreement and a
related agreement that Guarantor shall have executed and delivered this
Guaranty;
NOW, THEREFORE, in consideration of the premises and in order to induce
the Holder to consummate the transactions contemplated by Amendment No. 1,
including, without limitation, its acceptance of the Note, and in exchange for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Guarantor hereby agrees with the Holder as follows:
1. Guaranty
Guarantor hereby unconditionally guarantees the punctual payment when
due, whether at stated maturity, by acceleration or otherwise, of the principal
amount of the Note, together with all interest accrued thereon and expenses
relating thereto, including any and all expenses (including reasonable counsel
fees and expenses) incurred by the Holder in enforcing any rights under the
Note, the Security Agreement and this Guaranty (collectively, the "Guaranteed
Obligations"). Without limiting the generality of the foregoing, Guarantor's
liability shall extend to all amounts that constitute part of the Guaranteed
Obligations by the Buyer to the Holder under the Note, the Security Agreement or
any other agreement providing security for the Note (collectively, together with
this Guaranty, the "Loan Documents") even though they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Buyer. This is a guaranty of payment and not
collection.
2. Guaranty Absolute
Guarantor guarantees that the Guaranteed Obligations will be paid
strictly in accordance with the terms of the Loan Documents, 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 Holder with respect thereto.
The obligations of Guarantor under this Guaranty are independent of the
Guaranteed Obligations, and a separate action or actions may be brought and
prosecuted against Guarantor to enforce this Guaranty, irrespective of whether
any action is brought against the Buyer or any other guarantor or whether the
Buyer or any other guarantor is joined in any such action or actions. The
liability of Guarantor under this Guaranty shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or any other amendment
or waiver of or any consent to departure from any Loan Document;
(c) any taking, exchange or release of, or non-perfection of any
security interest in, any collateral under the Security Agreement;
(d) any manner of application of collateral to all or any of the
Guaranteed Obligations, or any manner of sale or other disposition of any
collateral for all or any of the Guaranteed Obligations or any other assets of
the Buyer or any of its affiliates;
(e) any change, restructuring or termination of the limited liability
structure or existence of the Buyer, and any termination of or change in the
relationship between the Buyer and Guarantor; or
(f) any other circumstance (including, without limitation, any statute
of limitations) that might otherwise constitute a defense available to, or a
discharge of, the Buyer or a guarantor.
This Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by the Holder upon the insolvency,
bankruptcy or reorganization of the Buyer or otherwise, all as though such
payment had not been made. In the event of any such reinstatement, Guarantor
shall re-execute and redeliver all documents, and take all other actions
necessary or appropriate to reinstate this Guaranty in full force and effect and
to effectuate its intent.
3. Waivers and Agreements
(a) Guarantor hereby irrevocably waives promptness, diligence, notice
of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that the Holder protect,
secure, perfect or insure any security interest or lien or any property subject
thereto or exhaust any right or take any action against the Buyer or any other
person or any collateral.
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(b) Guarantor hereby irrevocably agrees that any claim or other rights
that it may now or hereafter acquire against the Buyer or any guarantor of the
Buyer's obligations under the Note that arise from the existence, payment,
performance or enforcement of Guarantor's obligations under this Guaranty or any
other Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Holder against the Buyer or any such
guarantor or any collateral under the Security Agreement, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from the Buyer
or any such guarantor, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such claim,
remedy or right, shall be subordinated to the payment in full of all amounts due
and owing and the performance of all obligations under the Note and the other
Loan Documents and shall not be made or exercised until the date the Buyer has
indefeasibly paid in full in cash all amounts due and owing under the Note and
the other Loan Documents. If any amount shall be paid to Guarantor in violation
of the preceding sentence at any time prior to the indefeasible payment in full
of the Guaranteed Obligations and all other amounts payable under this Guaranty,
such amount shall be held in trust for the benefit of the Holder and shall
forthwith be applied to the Guaranteed Obligations and all other amounts payable
under this Guaranty, whether matured or unmatured, in accordance with the terms
of the Loan Documents, or be held as collateral for any Guaranteed Obligations
or other amounts payable under this Guaranty thereafter arising.
(c) Guarantor acknowledges that it will receive direct and indirect
benefits from the financing accommodations contemplated by the Loan Documents
and that the waivers set forth in this Section 3 are knowingly made in
contemplation of such benefits.
4. Payments
Guarantor hereby unconditionally and irrevocably agrees that any
payments made pursuant to this Guaranty will be paid at the place specified in
the Note for payments in immediately available funds, free and clear of, and
without deduction for, any and all taxes, levies, imposts, deductions and
withholdings whatsoever imposed, levied, collected or assessed with respect
thereto by any political subdivision or taxing authority thereof or by any
country or any political subdivision or taxing authority thereof (other than
income taxes or franchise taxes of the United States of America or any political
subdivision thereof) strictly in accordance with the terms and provisions of the
Loan Documents. If such payments are subject to any such tax, levy, impost,
deduction or withholding, then such payments shall be increased to such amount
which, after provision for such tax, levy, impost, deduction or withholding, is
necessary to yield and remit to the Holder the amount which would have been
received absent such tax, levy, impost, deduction or withholding, and Guarantor
shall furnish the Holder such evidence or certification of making such tax,
levy, impost, deduction or withholding as the Holder may request.
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5. Right to Set Off
Upon (a) the occurrence and during the continuance of any Event of
Default and (b) the declaration by the Holder that all amounts owing under the
Note are immediately due and payable or upon an Automatic Acceleration Event,
the Holder is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all funds or
properties at any time held, and other indebtedness at any time owning, by or on
behalf of the Holder to or for the credit or the account of Guarantor or
hereafter existing under or in respect of this Guaranty, irrespective of whether
the Holder shall have made any demand under this Guaranty and although such
obligations may be unmatured. The rights of the Holder under this Section 5 are
in addition to any other rights and remedies that the Holder may have.
6. Representations and Warranties
Guarantor hereby represents and warrants as follows:
(a) Legal Capacity
Guarantor has all requisite legal capacity to execute and deliver this
Guaranty and to perform fully his obligations hereunder.
(b) Enforceability
This Guaranty constitutes the valid and legally binding obligation of
Guarantor, enforceable against Guarantor in accordance with its terms.
(c) Freedom to Contract
The execution, delivery and performance of this Guaranty by Guarantor
will not: (i) violate any of the terms, conditions or provisions of any
applicable law, rule, statute, regulation, order, writ, injunction, judgment, or
decree of any governmental authority; or (ii) conflict with or result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default under any of the terms, conditions or provisions of any
agreement, arrangement or understanding to which Guarantor is a party.
7. Guarantor's Covenants
(a) Guarantor shall not enter into any transaction or take any action,
including, without limitation, the transfer of any asset, or omit to take any
action that could reasonably be expected to materially and adversely affect
Guarantor's ability to make any payment of principal or interest or expenses in
respect of any Guaranteed Obligation or otherwise impair its ability to perform
any of its obligations under this Guaranty.
(b) Guarantor shall permit representatives of the Holder to visit and
inspect properties of Guarantor during reasonable hours and upon reasonable
notice to Guarantor, inspect Guarantor's books and records, and discuss with the
principal officers of Guarantor its businesses, assets, liabilities, financial
position, results of operations and prospects.
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(c) Guarantor shall notify the Holder immediately upon the institution
of any litigation, or the occurrence of any other event or circumstance, or any
change in its assets, properties, financial condition or prospects, which could
reasonably be expected to materially and adversely affect its ability to perform
any of its obligations under this Guaranty.
8. Miscellaneous
(a) Amendments, Etc.
No amendment or waiver of any provision of this Guaranty, and no
consent to any departure by Guarantor herefrom, shall in any event be effective
unless the same shall be in writing and signed by Guarantor and the Holder, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
(b) Notices
All notices, consents, requests, instructions, approvals, and other
communications provided for herein shall be deemed validly given if in writing
and delivered personally or sent by overnight courier, or by certified mail,
postage prepaid and return receipt requested, to:
If to the Guarantor: Xxxxxx Xxxxxx
000 Xxxxxxxxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
With copy to: Xxxxxxx Xxxxxx, Esq.
Xxxxxxx Xxxxxxxx & Xxxx LLP
00 XxXxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
If to the Holder:
EasyLink Services Corporation
00 Xxxxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
With copy to: Xxxxx Xxxxxxxx, Esq.
Executive Vice President and General Counsel
EasyLink Services Corporation
00 Xxxxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Notice shall be deemed to have been given on the date of delivery if
delivered personally or by overnight courier and on the third day following the
date of mailing if delivered by certified mail.
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(c) Governing Law, Choice Of Forum, No Trial By Jury
(i) This Guaranty shall be governed by and construed in accordance with
the internal laws of the State of New Jersey, The United States of America,
applicable to agreements made and to be performed entirely within the State of
New Jersey without regard to the conflicts of law principles of the State of New
Jersey.
(ii) The Guarantor hereby (i) irrevocably consents and agrees that any
legal or equitable action or proceeding arising under or in connection with this
Guaranty may be brought in the courts of appropriate jurisdiction sitting in New
Jersey and in any court to which an appeal may be taken in any such litigation,
and (ii) by execution and delivery of this Guaranty, the Guarantor further
agrees that service of any process, summons, notice or document by U.S.
registered mail to the Guarantor's address set forth in Amendment No. 1 shall be
effective service of process for any action, suit or proceeding in the State of
New Jersey with respect to any matters to which it has submitted to jurisdiction
in this Section. The Guarantor irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of or based upon the Note in the courts of the State of New Jersey and hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.
(iii) BY ITS EXECUTION AND DELIVERY OF THIS GUARANTY, GUARANTOR HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES ANY RIGHTS HE MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR
IN CONNECTION WITH, THIS GUARANTY, THE NOTE OR ANY OTHER LOAN DOCUMENT, ANY OF
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF GUARANTOR OR
THE HOLDER IN CONNECTION HEREWITH OR THEREWITH. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE HOLDER TO ACCEPT THE NOTE.
(d) Waiver
Guarantor hereby waives promptness, diligence, notice of acceptance and
any other notice with respect to Guarantor's obligations hereunder and any
requirement that the Holder exhaust any right or take any action against the
Buyer or Guarantor or another person.
(e) Rights Cumulative
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No failure on the part of the Holder to exercise, and no delay in
exercising, any right or power hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right or power preclude any
other or further exercise thereof or the exercise of any other right or power.
The rights and remedies of the Holder provided herein are cumulative and are in
addition to, and not exclusive of, any rights or remedies provided by law. No
provision for a specific remedy shall be deemed to limit the Holder's remedies
at law or in equity. The rights of the Holder hereunder are not conditional or
contingent on any attempt by the Holder to exercise any of its rights under any
other document against Guarantor or against any other person.
(f) Assignment
This Guaranty shall be binding on Guarantor and its successors and
permitted assigns (including any trustee succeeding to the rights of Guarantor
pursuant to Chapter 11 of the Bankruptcy Code or pursuant to any conversion to a
case or cases under Chapter 7 of the Bankruptcy Code or any similar foreign
law), and shall inure, together with all rights and remedies of the Holder
hereunder, to the benefit of the Holder and its successors and assigns, provided
that Guarantor may not assign any of its rights or obligations hereunder without
the prior written consent of the Holder and any purported assignment without
such consent shall be null and void.
(g) Survival of Representations and Warranties
All representations and warranties of Guarantor contained herein or
made in connection herewith shall survive the making of and shall not be waived
by the execution and delivery of this Guaranty or any other Loan Document or any
investigation by the Holder. All covenants and agreements of Guarantor contained
herein shall continue in full force and effect from and after the date hereof
until the indefeasible payment in full of the Guaranteed Obligations.
(h) Severability
Whenever possible each provision of this Guaranty shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Guaranty shall be prohibited by, illegal, unenforceable or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition, illegality, unenforceability or invalidity under such law,
without invalidating the remainder of such provision or the remaining provisions
of this Guaranty.
(i) Interpretation
Guarantor and the Holder have participated jointly in the negotiation
and drafting of this Guaranty. In the event that any ambiguity or question of
intent or interpretation arises, this Guaranty shall be construed as if drafted
jointly by the parties hereto and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of authorship of any provisions of
this Guaranty.
(j) Headings
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Section headings in this Guaranty are included for convenience of
reference only and shall not constitute a part of this Guaranty for any other
purpose.
(k) Counterparts
This Guaranty may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which, when taken together, shall constitute a single contract.
Delivery of an executed counterpart of a signature page to this Guaranty by
telecopy shall be as effective as delivery of a manually executed counterpart of
this Guaranty.
(l) Entire Agreement
This Guaranty, the Security Agreement, the Note, Amendment No. 1 and
the Agreement embody the entire agreement between the parties hereto relating to
the transactions provided for herein and therein and supersede all prior
understandings and agreements, whether written or oral, between the parties
hereto with respect to such transactions.
[Signature page follows]
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed and delivered as of the date first above written.
s/X. Xxxxxx
-----------
Xxxxxx Xxxxxx
Accepted by:
EASYLINK SERVICES CORPORATION
By s/Xxxxxx X. Xxxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman, President and Chief Executive Officer
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