Exhibit 10.4

 

PERSONAL GUARANTY

1.            Identification.

 

This Guaranty (the “Guaranty”), dated as of June __, 2017, is entered into among
Joseph Segelman (“Guarantor”) for the benefit of the Alpha Capital Anstalt and
Brio Capital Master Fund Ltd. (the “Holders”) the holder of those certain notes
in the principal amount of up to $1,125,000.00 (the “Notes”) issued (or to be
issued) by Reign Sapphire Corporation (“Borrower”) to Holders pursuant to that
certain Loan Agreement of even date herewith.

 

2.            Recitals.

 

2.1       Holders have made or will make loans to Borrower in the principal
amount of up to $1,125,000.00 (the “Loans”). Guarantor is a shareholder officer
and director of the Borrower and will obtain substantial benefit from the
proceeds of the Loans.

 

2.2       The Loans are evidenced by the Notes.

 

2.3       In consideration of the Loans made or to be made by Holders to
Borrower and for other good and valuable consideration, and as security for the
performance by Borrower of its obligations under the Notes and as security for
the repayment of the Loans and all other sums due from Borrower to Holders
arising under the Notes, collectively, the “Obligations”, Guarantor, for good
and valuable consideration, receipt of which is acknowledged, has agreed to
enter into this Guaranty.

 

3.            Guaranty.

 

3.1       Guaranty. Guarantor hereby unconditionally and irrevocably, jointly
and severally with the Borrower, 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
Borrower, 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 Borrower 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 Holders 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
Borrower to Holders, but for the fact that they are unenforceable or not
allowable due to the existence of an insolvency, bankruptcy or reorganization
involving Borrower.

 

1

 

 

3.2       Guaranty Absolute. Guarantor guaranties that the Obligations will be
paid strictly in accordance with the terms of the Notes, 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 Holders 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 Borrower or whether the Borrower or any other Guarantor is joined in any
such action or actions. The liability of the 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;

 

(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 Borrower
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 Borrower; or

 

(e) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by the
Holders that might otherwise constitute a defense available to, or a discharge
of, Borrower 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 Holders or any other entity upon the insolvency,
bankruptcy or reorganization of Borrower 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 waive promptness, diligence, notice of
acceptance and any other notice with respect to any of the Obligations and this
Guaranty and any requirement that the Holders or exhaust any right or take any
action against Borrower or any other Guarantor, person or entity or any
collateral. Guarantor acknowledge that it will receive direct and indirect
benefits from the SEA and 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
acknowledge 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 and Notes, (b) be binding upon Guarantor, his
successors and assigns and (c) inure to the benefit of and be enforceable by the
Holders and its successors, pledgees, transferees and assigns. Without limiting
the generality of the foregoing clause, (c) Holders 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 Notes owing
to it) to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted such Holder herein or
otherwise.

 

3.5        Subrogation. Guarantor will not exercise any rights that it may now
or hereafter acquire against the Holders 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 Holders 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.

 

2

 

 

4.            Miscellaneous.

 

4.1       Expenses. Guarantor shall pay to the Holders, on demand, the amount of
any and all reasonable expenses, including, without limitation, attorneys’ fees,
legal expenses and brokers’ fees, which the Holders may incur in connection with
exercise or enforcement of any the rights, remedies or powers of the Holders
hereunder or with respect to any or all of the Obligations.

 

4.2       Waivers, Amendment and Remedies. No course of dealing by the Holders
and no failure by the Holders to exercise, or delay by the Holders 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 Holders. 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 Holders, 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
Holders, 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 Holders from time to time in such order as the
Holders may elect.

 

4.3       Notices. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the first business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

 

  To Guarantor: [RC]         To Holders: [RC]           If to Holders with a
copy by fax only (which shall not constitute notice) to Grushko & Mittman, P.C.
    Fax: (212) 697-3575

 

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 Holders and its respective successors and assigns. Upon
the payment in full of the Obligations, (i) this Guaranty shall terminate and
(ii) the Holders 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.

 

3

 

 

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
state and federal courts located in the State and County of New York, and, by
execution and delivery of this Guaranty, Guarantor hereby irrevocably accepts
for himself and in respect of his 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 the Guarantor for the payment of
money and, without limitation to any other remedies of Holders, 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 Holders and Guarantor are parties or which Guarantor
delivered to Holders, which may be convenient or necessary to determine Holders’
rights hereunder or Guarantor’s obligations to Holders 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. The Guarantor agrees that
service of process in any action brought by the Holders to enforce the terms of
this Guaranty may be made by sending such documents to Guarantor in the same
manner that notice is to be made in accordance with Section 4.3 of this
Guaranty. Nothing herein shall preclude Holders from effectuating service in any
other manner allowable under applicable law.

 

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.

 

4.8       Execution. This Agreement may be executed and delivered by electronic
signature and transmission.

 

[THE BALANCE OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

 

4

 

 

IN WITNESS WHEREOF, the undersigned has executed and delivered this Guaranty, as
of the date first written above.

 

GUARANTOR

 

  Yosef Segelman    

 

5