FORM OF PERSONAL GUARANTY
FORM
OF PERSONAL GUARANTY
1. Identification.
This
Guaranty (the "Guaranty"), dated as of September ___, 2007, is entered into
by
_____________ (“Guarantor”), for the benefit of the Collateral Agent identified
below and the parties identified on Schedule A hereto (each a “Lender” and
collectively, the "Lenders").
2. Recitals.
2.1 Guarantor
is the ___________ and a shareholder of Pay88, Inc., a Nevada corporation (the
“Company”). Lenders have made or will make loans to the Company (the "Loan").
Guarantor will obtain substantial benefit from the proceeds of the
Loan.
2.2 The
Loan
is evidenced by certain secured promissory Notes (“Notes”) issued by the Company
on or about September ___, 2007, pursuant to subscription agreements dated
as of
September ___, 2007 (each a “Subscription Agreement”).
2.3 In
consideration of the Loan made or to be made by Lenders to the Company and
for
other good and valuable consideration, and as security for the performance
by
the Company of its obligations under the Notes and as security for the repayment
of the Loan and all other sums due from the Company to Lenders arising under
the
Notes, Subscription Agreement and any other agreement between or among them
relating to the foregoing (collectively, the "Obligations"), Guarantor, for
good
and valuable consideration, receipt of which is acknowledged, has agreed to
enter into this Guaranty.
2.4 The
Lenders have appointed __________________________ as Collateral Agent pursuant
to that certain Collateral Agent Agreement dated at or about the date of this
Agreement (“Collateral Agent Agreement”), among the Lenders and Collateral
Agent.
3. Guaranty.
3.1 Guaranty.
Guarantor hereby unconditionally and irrevocably guarantees, the punctual
payment, performance and observance when due, whether at stated maturity, by
acceleration or otherwise, of all of the Obligations now or hereafter existing,
whether for principal, interest (including, without limitation, all interest
that accrues after the commencement of any insolvency, bankruptcy or
reorganization of the Company, whether or not constituting an allowed claim
in
such proceeding), fees, commissions, expense reimbursements, liquidated damages,
indemnifications or otherwise (such obligations, to the extent not paid by
the
Company being included in the “Obligations”), and agrees to pay any and all
reasonable costs, fees and expenses (including reasonable counsel fees and
expenses) incurred by the Lenders in enforcing any rights under the guaranty
set
forth herein. Without limiting the generality of the foregoing, Guarantor’s
liability shall extend to all amounts that constitute part of the Obligations
and would be owed by the Company to Lenders, but for the fact that they are
unenforceable or not allowable due to the existence of an insolvency, bankruptcy
or reorganization involving the Company.
3.2 Guaranty
Absolute.
Guarantor guarantees 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 Lenders with respect thereto. The obligations of Guarantor under
this Guaranty are independent of the Obligations, and a separate action or
actions may be brought and prosecuted against Guarantor to enforce such
Obligations, irrespective of whether any action is brought against the Company
or any other Guarantor or whether the Company or any other Guarantor is joined
in any such action or actions. The liability of Guarantor under this Guaranty
constitutes a primary obligation, and not a contract of surety, and to the
extent permitted by law, shall be irrevocable, absolute and unconditional
irrespective of, and Guarantor hereby irrevocably waives any defenses it may
now
or hereafter have in any way relating to, any or all of the
following:
(a)
any
lack
of validity or enforceability of the Notes or any agreement or instrument
relating thereto;
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(b)
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 Notes, including, without limitation, any increase in the
Obligations resulting from the extension of additional credit to the Company
or
otherwise;
(c)
any
taking, exchange, release, subordination or non-perfection of any Collateral,
or
any taking, release or amendment or waiver of or consent to departure from
any
other guaranty, for all or any of the Obligations;
(d)
any
change, restructuring or termination of the corporate, limited liability company
or partnership structure or existence of the Company; or
(e)
any
other
circumstance (including, without limitation, any statute of limitations) or
any
existence of or reliance on any representation by the Lenders that might
otherwise constitute a defense available to, or a discharge of, the Company
or
any other guarantor or surety.
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 Obligations is rescinded or must otherwise
be returned by the Lenders or any other entity upon the insolvency, bankruptcy
or reorganization of the Company or otherwise (and whether as a result of any
demand, settlement, litigation or otherwise), all as though such payment had
not
been made.
3.3 Waiver.
Guarantor hereby waives promptness, diligence, notice of acceptance and any
other notice with respect to any of the Obligations and this Guaranty and any
requirement that the Lenders or exhaust any right or take any action against
the
Company or any other person or entity or any Collateral. Guarantor acknowledges
that it will receive direct and indirect benefits from the financing
arrangements contemplated herein and that the waiver set forth in this
Section 3.3
is
knowingly made in contemplation of such benefits. Guarantor hereby waives any
right to revoke this Guaranty, and acknowledges that this Guaranty is continuing
in nature and applies to all Obligations, whether existing now or in the
future.
3.4
Continuing
Guaranty; Assignments.
This
Guaranty is a continuing guaranty and shall (a) remain in full force and effect
until the later of the indefeasible cash payment in full of the Obligations
and
all other amounts payable under this Guaranty, the Subscription Agreements
and
Note, (b) be binding upon Guarantor, its successors and assigns and (c) inure
to
the benefit of and be enforceable by the Lenders and its successors, pledgees,
transferees and assigns. Without limiting the generality of the foregoing
clause, (c) Lenders may pledge, assign or otherwise transfer all or any
portion of its rights and obligations under this Guaranty (including, without
limitation, all or any portion of its Note owing to it) to any other Person,
and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted such Lenders herein or otherwise.
3.5
Subrogation.
No
Guarantor will exercise any rights that it may now or hereafter acquire against
the Lenders or other Guarantor (if any) that arise from the existence, payment,
performance or enforcement of such Guarantor’s obligations under this Guaranty,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification, 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 Lenders or other
Guarantor, directly or indirectly, in cash or other property or by set-off
or in
any other manner, payment or security solely on account of such claim, remedy
or
right, unless and until all of the Obligations and all other amounts payable
under this Guaranty shall have been indefeasibly paid in full.
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3.6
Maximum
Obligations.
Notwithstanding any provision herein contained to the contrary, Guarantor’s
liability with respect to the Obligations shall be limited to an amount not
to
exceed, as of any date of determination, the amount that could be claimed by
▇▇▇▇▇▇▇ from Guarantor without rendering such claim voidable or avoidable under
Section 548 of the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute
or
common law.
4. Miscellaneous.
4.1 Expenses.
Guarantor shall pay to the Lenders, on demand, the amount of any and all
reasonable expenses, including, without limitation, attorneys' fees, legal
expenses and brokers' fees, which the Lenders may incur in connection with
exercise or enforcement of any the rights, remedies or powers of the Lenders
hereunder or with respect to any or all of the Obligations.
4.2 Waivers,
Amendment and Remedies.
No
course of dealing by the Lenders and no failure by the Lenders to exercise,
or
delay by the Lenders in exercising, any right, remedy or power hereunder shall
operate as a waiver thereof, and no single or partial exercise thereof shall
preclude any other or further exercise thereof or the exercise of any other
right, remedy or power of the Lenders. No amendment, modification or waiver
of
any provision of this Guaranty and no consent to any departure by Guarantor
therefrom, shall, in any event, be effective unless contained in a writing
signed by the Lenders, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given. The
rights, remedies and powers of the Lenders, not only hereunder, but also under
any instruments and agreements evidencing or securing the Obligations and under
applicable law are cumulative, and may be exercised by the Lenders from time
to
time in such order as the Lenders may elect.
4.3 Notices.
All
notices or other communications given or made hereunder shall be in writing
and
shall be personally delivered or deemed delivered the first business day after
being faxed (provided that a copy is delivered by first class mail) to the
party
to receive the same at its address set forth below or to such other address
as
either party shall hereafter give to the other by notice duly made under this
Section:
To
Guarantor, to:
c/o
Pay88, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Barnstead,
NH 03225
Attn:
▇▇▇
▇▇▇, CEO and President
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
With
an
additional copy by telecopier only to:
▇▇▇▇▇
▇▇▇▇▇ & Associates
▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Valley
Stream, NY 11580
Attn:
▇▇▇▇▇ ▇▇▇▇▇, Esq.
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
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To
Lenders:
To
the
addresses and telecopier numbers listed on Schedule A hereto
If
to the
Company, Guarantor or Lenders
with
a
copy by telecopier only to:
▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, P.C.
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Any
party
may change its address by written notice in accordance with this
paragraph.
4.4 Term;
Binding Effect.
This
Guaranty shall (a) remain in full force and effect until payment and
satisfaction in full of all of the Obligations; (b) be binding upon Guarantor
and its successors and permitted assigns; and (c) inure to the benefit of the
Lenders and its respective successors and assigns. Upon
the
payment in full of the Obligations, (i) this Guaranty shall terminate and (ii)
the Lenders will, upon Guarantor's request and at Guarantor's expense, execute
and deliver to Guarantor such documents as Guarantor shall reasonably request
to
evidence such termination, all without any representation, warranty or recourse
whatsoever.
4.5 Captions.
The
captions of Paragraphs, Articles and Sections in this Guaranty have been
included for convenience of reference only, and shall not define or limit the
provisions hereof and have no legal or other significance
whatsoever.
4.6 Governing
Law; Venue; Severability.
This
Guaranty shall be governed by and construed in accordance with the laws of
the
State of New York without regard to principles of conflicts or choice of law.
Any legal action or proceeding against Guarantor with respect to this Guaranty
may be brought in the courts of the State of New York or of the United States
for the Southern District of New York, and, by execution and delivery of this
Guaranty, Guarantor hereby irrevocably accepts for itself and in respect of
its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Guarantor hereby irrevocably waives any objection which they may now
or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Guaranty brought in the
aforesaid courts and hereby further irrevocably waives and agrees not to plead
or claim in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum. If any provision of this
Guaranty, or the application thereof to any person or circumstance, is held
invalid, such invalidity shall not affect any other provisions which can be
given effect without the invalid provision or application, and to this end
the
provisions hereof shall be severable and the remaining, valid provisions shall
remain of full force and effect. This
Guaranty shall be deemed an unconditional obligation of Guarantor for the
payment of money and, without limitation to any other remedies of Lenders,
may
be enforced against Guarantor by summary proceeding pursuant to New York Civil
Procedure Law and Rules Section 3213 or any similar rule or statute in the
jurisdiction where enforcement is sought. For purposes of such rule or statute,
any other document or agreement to which Lenders and Guarantor are parties
or
which Guarantor delivered to Lenders, which may be convenient or necessary
to
determine Lenders’ rights hereunder or Guarantor’s obligations to Lenders are
deemed a part of this Guaranty, whether or not such other document or agreement
was delivered together herewith or was executed apart from this
Guaranty.
Each
party hereby irrevocably waives personal service of process and consents to
process being served in any suit, action or proceeding in connection with this
Agreement or any other Transaction Document by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
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 other manner permitted by law.
Guarantor irrevocably appoints the officers, directors and any agent for service
of process of the Company as Guarantor’s true and lawful agent for service of
process upon whom all processes of law and notices may be served and given
in
the manner described above; and such service and notice shall be deemed valid
personal service and notice upon Guarantor with the same force and validity
as
if served upon Guarantor.
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4.7 Satisfaction
of Obligations.
For all
purposes of this Guaranty, the payment in full of the Obligations shall be
conclusively deemed to have occurred when the Obligations have been indefeasibly
paid or all outstanding Notes have been converted to common stock pursuant
to
the terms of the Notes and the Subscription Agreements.
4.8 Counterparts/Execution.
This
Agreement may be executed in any number of counterparts and by the different
signatories hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but
one
and the same instrument. This Agreement may be executed by facsimile signature
and delivered by facsimile transmission.
IN
WITNESS WHEREOF, the
undersigned have executed and delivered this Personal Guaranty, as of the date
first written above.
“GUARANTOR”
This
Personal Guaranty Agreement may be signed by facsimile signature
and
delivered
by confirmed facsimile transmission.
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SCHEDULE
A TO GUARANTY
|
LENDER
|
PRINCIPAL
AMOUNT OF NOTE TO BE ISSUED ON THE INITIAL CLOSING
DATE
|
|
PRINCIPAL
AMOUNT OF NOTE TO BE ISSUED ON THE SECOND CLOSING
DATE
|
|
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