Document:

EX-10.3

 

Exhibit 10.3

SUBSIDIARY GUARANTEE

     SUBSIDIARY GUARANTEE, dated as of July 31, 2006 (this “Guarantee”), made by each of
the signatories hereto (together with any other entity that may become a party hereto as provided
herein, (the “Guarantors”), in favor of the purchasers signatory (the “Purchasers”)
to that certain Securities Purchase Agreement, dated as of the date hereof, between Hartville
Group, Inc., a Nevada corporation (the “Company”) and the Purchasers.

W I T N E S S E T H:

     WHEREAS, pursuant to that certain Securities Purchase Agreement, dated as of the date hereof,
by and between the Company and the Purchasers (the “Purchase Agreement”), the Company has
agreed to sell and issue to the Purchasers, and the Purchasers have agreed to purchase from the
Company the Company’s Original Issue Discount Secured Convertible Debentures, due July 31, 2009
(the “Debentures”), subject to the terms and conditions set forth therein; and

     WHEREAS, each Guarantor will directly benefit from the extension of credit to the Company
represented by the issuance of the Debentures; and

     NOW, THEREFORE, in consideration of the premises and to induce the Purchasers to enter into
the Purchase Agreement and to carry out the transactions contemplated thereby, each Guarantor
hereby agrees with the Purchasers as follows:

     1. Definitions. Unless otherwise defined herein, terms defined in the Purchase
Agreement and used herein shall have the meanings given to them in the Purchase Agreement. The
words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import when used in this
Guarantee shall refer to this Guarantee as a whole and not to any particular provision of this
Guarantee, and Section and Schedule references are to this Guarantee unless otherwise specified.
The meanings given to terms defined herein shall be equally applicable to both the singular and
plural forms of such terms. The following terms shall have the following meanings:

     “Guarantee” means this Subsidiary Guarantee, as the same may be amended,
supplemented or otherwise modified from time to time.

     “Obligations” means the collective reference to all liabilities and
obligations (primary, secondary, direct, contingent, sole, joint or several) due or to
become due, or that are now or may be hereafter contracted or acquired, or owing to, of the
Company to the Purchaser, including, without limitation, obligations and undertakings of
the Company of whatever nature, monetary or otherwise, under the Debentures, the Purchase
Agreement, the Security Agreement, the Warrants, the Registration Rights Agreement or any
other future agreement or obligations undertaken by the Company to the Purchasers, together
with all

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reasonable attorneys’ fees, disbursements and all other costs and expenses of
collection incurred by Purchasers in enforcing any of such Obligations and/or this
Guarantee.

     2. Guarantee.

     (a) Guarantee.

	 	(i)	 	The Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantee to the
Purchasers and their respective successors, indorsees, transferees
and assigns, the prompt and complete payment and performance by the
Company when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations.
	 
	 	(ii)	 	Anything herein or in any other Transaction
Document to the contrary notwithstanding, the maximum liability of
each Guarantor hereunder and under the other Transaction Documents
shall in no event exceed the amount which can be guaranteed by such
Guarantor under applicable federal and state laws, including laws
relating to the insolvency of debtors, fraudulent conveyance or
transfer or laws affecting the rights of creditors generally (after
giving effect to the right of contribution established in Section
2(b)).
	 
	 	(iii)	 	Each Guarantor agrees that the Obligations
may at any time and from time to time exceed the amount of the
liability of such Guarantor hereunder without impairing the guarantee
contained in this Section 2 or affecting the rights and remedies of
the Purchasers hereunder.
	 
	 	(iv)	 	The guarantee contained in this Section 2
shall remain in full force and effect until all the Obligations and
the obligations of each Guarantor under the guarantee contained in
this Section 2 shall have been satisfied by payment in full.
	 
	 	(v)	 	No payment made by the Company, any of the
Guarantors, any other guarantor or any other Person or received or
collected by the Purchasers from the Company, any of the Guarantors,
any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time
or from time to time in reduction of or in payment of the Obligations
shall be deemed to modify, reduce, release or otherwise affect

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	 	 	 	the liability of any Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by
such Guarantor in respect of the Obligations or any payment
received or collected from such Guarantor in respect of the
Obligations), remain liable for the Obligations up to the maximum
liability of such Guarantor hereunder until the Obligations are
paid in full.
	 
	 	(vi)	 	Notwithstanding anything to the contrary in
this Agreement, with respect to any defaulted non-monetary
Obligations the specific performance of which by the Guarantors is
not reasonably possible (e.g. the issuance of the Company’s Common
Stock), the Guarantors shall only be liable for making the Purchasers
whole on a monetary basis for the Company’s failure to perform such
Obligations in accordance with the Transaction Documents.

     (b) Right of Contribution. Each Guarantor hereby agrees that to the extent
that a Guarantor shall have paid more than its proportionate share of any payment made
hereunder, such Guarantor shall be entitled to seek and receive contribution from and
against any other Guarantor hereunder which has not paid its proportionate share of such
payment. Each Guarantor’s right of contribution shall be subject to the terms and
conditions of Section 2(c). The provisions of this Section 2(b) shall in no respect limit
the obligations and liabilities of any Guarantor to the Purchasers, and each Guarantor
shall remain liable to the Purchasers for the full amount guaranteed by such Guarantor
hereunder.

     (c) No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the Purchasers, no
Guarantor shall be entitled to be subrogated to any of the rights of the Purchasers against
the Company or any other Guarantor or any collateral security or guarantee or right of
offset held by the Purchasers for the payment of the Obligations, nor shall any Guarantor
seek or be entitled to seek any contribution or reimbursement from the Company or any other
Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing
to the Purchasers by the Company on account of the Obligations are paid in full. If any
amount shall be paid to any Guarantor on account of such subrogation rights at any time
when all of the Obligations shall not have been paid in full, such amount shall be held by
such Guarantor in trust for the Purchasers, segregated from other funds of such Guarantor,
and shall, forthwith upon receipt by such Guarantor, be turned over to the Purchasers in
the exact form received by such Guarantor (duly indorsed by such Guarantor to the
Purchasers, if required), to be applied against the Obligations, whether matured or
unmatured, in such order as the Purchasers may determine.

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     (d) Amendments, Etc. With Respect to the Obligations. Each Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of rights against
any Guarantor and without notice to or further assent by any Guarantor, any demand for
payment of any of the Obligations made by the Purchasers may be rescinded by the Purchasers
and any of the Obligations continued, and the Obligations, or the liability of any other
Person upon or for any part thereof, or any collateral security or guarantee therefor or
right of offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Purchasers, and the Purchase Agreement and the other Transaction Documents
and any other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Purchasers may deem
advisable from time to time, and any collateral security, guarantee or right of offset at
any time held by the Purchasers for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released. The Purchasers shall have no obligation to protect,
secure, perfect or insure any Lien at any time held by them as security for the Obligations
or for the guarantee contained in this Section 2 or any property subject thereto.

     (e) Guarantee Absolute and Unconditional. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligations and notice
of or proof of reliance by the Purchasers upon the guarantee contained in this Section 2 or
acceptance of the guarantee contained in this Section 2; the Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this Section 2;
and all dealings between the Company and any of the Guarantors, on the one hand, and the
Purchasers, on the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor
waives to the extent permitted by law diligence,
presentment, protest, demand for payment and notice of default or nonpayment to or
upon the Company or any of the Guarantors with respect to the Obligations. Each Guarantor
understands and agrees that the guarantee contained in this Section 2 shall be construed as
a continuing, absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of the Purchase Agreement or any other Transaction Document, any
of the Obligations or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by the Purchasers, (b)
any defense, set-off or counterclaim (other than a defense of payment or performance or
fraud or misconduct by Purchasers) which may at any time be available to or be asserted by
the Company or any other Person against the Purchasers, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Company or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal discharge of the
Company for the Obligations, or of such Guarantor under the guarantee contained in this
Section 2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise

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pursuing its rights and remedies hereunder against any Guarantor, the Purchasers may,
but shall be under no obligation to, make a similar demand on or otherwise pursue such
rights and remedies as they may have against the Company, any other Guarantor or any other
Person or against any collateral security or guarantee for the Obligations or any right of
offset with respect thereto, and any failure by the Purchasers to make any such demand, to
pursue such other rights or remedies or to collect any payments from the Company, any other
Guarantor or any other Person or to realize upon any such collateral security or guarantee
or to exercise any such right of offset, or any release of the Company, any other Guarantor
or any other Person or any such collateral security, guarantee or right of offset, shall
not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a matter of law,
of the Purchasers against any Guarantor. For the purposes hereof, “demand” shall include
the commencement and continuance of any legal proceedings.

     (f) Reinstatement. The guarantee contained in this Section 2 shall continue to
be effective, or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Obligations is rescinded or must otherwise be restored or returned
by the Purchasers upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Company or any Guarantor, or upon or as a result of the appointment
of a receiver, intervenor or conservator of, or trustee or similar officer for, the Company
or any Guarantor or any substantial part of its property, or otherwise, all as though such
payments had not been made.

     (g) Payments. Each Guarantor hereby guarantees that payments hereunder will be
paid to the Purchasers without set-off or counterclaim in U.S. dollars at the address set
forth or referred to in the Purchase Agreement.

     3. Representations and Warranties. Each Guarantor hereby makes the following
representations and warranties to Purchasers as of the date hereof:

     (a) Organization and Qualification. The Guarantor is a corporation, duly
incorporated, validly existing and in good standing under the laws of the applicable
jurisdiction set forth on Schedule 1, with the requisite corporate power and authority to
own and use its properties and assets and to carry on its business as currently conducted.
The Guarantor has no subsidiaries other than those identified as such on the Disclosure
Schedules to the Purchase Agreement. The Guarantor is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary, except where
the failure to be so qualified or in good standing, as the case may be, could not,
individually or in the aggregate, (x) adversely affect the legality, validity or
enforceability of any of this Guaranty in any material respect, (y) have a material adverse
effect on the results of operations, assets, prospects, or financial condition of the
Guarantor

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or (z) adversely impair in any material respect the Guarantor’s ability to perform
fully on a timely basis its obligations under this Guaranty (a “Material Adverse
Effect”).

     (b) Authorization; Enforcement. The Guarantor has the requisite corporate
power and authority to enter into and to consummate the transactions contemplated by this
Guaranty, and otherwise to carry out its obligations hereunder. The execution and delivery
of this Guaranty by the Guarantor and the consummation by it of the transactions
contemplated hereby have been duly authorized by all requisite corporate action on the part
of the Guarantor. This Guaranty has been duly executed and delivered by the Guarantor and
constitutes the valid and binding obligation of the Guarantor enforceable against the
Guarantor in accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, creditors’ rights and remedies or
by other equitable principles of general application.

     (c) No Conflicts. The execution, delivery and performance of this Guaranty by
the Guarantor and the consummation by the Guarantor of the transactions contemplated
thereby do not and will not (i) conflict with or violate any provision of its Certificate
of Incorporation or By-laws or (ii) conflict with, constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any agreement, indenture
or instrument to which the Guarantor is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Guarantor is subject (including Federal and state
securities laws and regulations), or by which any material property or asset of the
Guarantor is bound or affected, except in the case of each of clauses (ii) and (iii), such
conflicts, defaults, terminations, amendments, accelerations, cancellations and violations
as could not, individually or in the aggregate, have or result in a Material Adverse
Effect. The business of the Guarantor is not being conducted in violation of any law,
ordinance or regulation of any governmental authority, except for violations which,
individually or in the aggregate, do not have a Material Adverse Effect.

     (d) Consents and Approvals. The Guarantor is not required to obtain any
consent, waiver, authorization or order of, or make any filing or registration with, any
court or other federal, state, local, foreign or other governmental authority or other
person in connection with the execution, delivery and performance by the Guarantor of this
Guaranty.

     (e) Purchase Agreement. The representations and warranties of the Company set
forth in the Purchase Agreement as they relate to such Guarantor, each of which is hereby
incorporated herein by reference, are true and correct as

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of each time such representations are deemed to be made pursuant to such Purchase
Agreement, and the Purchasers shall be entitled to rely on each of them as if they were
fully set forth herein, provided, that each reference in each such representation and
warranty to the Company’s knowledge shall, for the purposes of this Section 3, be deemed to
be a reference to such Guarantor’s knowledge.

     (f) Foreign Law. Each Guarantor has consulted with appropriate foreign legal
counsel with respect to any of the above representations for which non-U.S. law is
applicable. Such foreign counsel have advised each applicable Guarantor that such counsel
knows of no reason why any of the above representations would not be true and accurate.
Such foreign counsel were provided with copies of this Subsidiary Guarantee and the
Transaction Documents prior to rendering their advice.

     4. Covenants.

     (a) Each Guarantor covenants and agrees with the Purchasers that, from and after the
date of this Guarantee until the Obligations shall have been paid in full, such Guarantor
shall take, and/or shall refrain from taking, as the case may be, each commercially
reasonable action that is necessary to be taken or not taken, as the case may be, so that
no Event of Default is caused by the failure to take such action or to refrain from taking
such action by such Guarantor.

     (b) So long as any of the Obligations are outstanding, each Guarantor will not
directly or indirectly on or after the date of this Guarantee:

     i. except with the prior written consent of the Agent (as defined in the
Security Agreement), enter into, create, incur, assume or suffer to exist any
indebtedness for borrowed money of any kind, including but not limited to, a
guarantee, on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom that
is senior to, or pari passu with, in any respect, such Guarantor’s obligations
hereunder;

     ii. enter into, create, incur, assume or suffer to exist any liens of any
kind, on or with respect to any of its property or assets now owned or hereafter
acquired or any interest therein or any income or profits therefrom that is senior
to, in any respect, such Guarantor’s obligations hereunder;

     iii. amend its certificate of incorporation, bylaws or other charter documents
so as to adversely affect any rights of the Holder hereunder;

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     iv. repay, repurchase or offer to repay, repurchase or otherwise acquire more
than a de minimis number of shares of its Common Stock or Common Stock Equivalents;

     v. enter into any agreement with respect to any of the foregoing; or

     vi. pay cash dividends on any equity securities of the Company.

     5. Miscellaneous.

     (a) Amendments in Writing. None of the terms or provisions of this Guarantee
may be waived, amended, supplemented or otherwise modified except in writing by the
Purchasers.

     (b) Notices. All notices, requests and demands to or upon the Purchasers or
any Guarantor hereunder shall be effected in the manner provided for in the Purchase
Agreement; provided that any such notice, request or demand to or upon any
Guarantor shall be addressed to such Guarantor at its notice address set forth on
Schedule 5(b).

     (c) No Waiver By Course Of Conduct; Cumulative Remedies. The Purchasers shall
not by any act (except by a written instrument pursuant to Section 5(a)), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any default under the Transaction Documents or Event of Default. No
failure to exercise, nor any delay in exercising, on the part of the Purchasers, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A waiver by the
Purchasers of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Purchasers would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any other rights or remedies provided by law.

     (d) Enforcement Expenses; Indemnification.

	 	(i)	 	Each Guarantor agrees to pay, or reimburse
the Purchasers for, all its costs and expenses incurred in collecting
against such Guarantor under the guarantee contained in Section 2 or
otherwise enforcing or preserving any rights under this Guarantee and
the other Transaction Documents to which such Guarantor is a party,
including, without limitation, the

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	 	 	 	reasonable fees and disbursements of counsel to the Purchasers.

	 	(ii)	 	Each Guarantor agrees to pay, and to save
the Purchasers harmless from, any and all liabilities with respect
to, or resulting from any delay in paying, any and all stamp, excise,
sales or other taxes which may be payable or determined to be payable
in connection with any of the transactions contemplated by this
Guarantee.
	 
	 	(iii)	 	Each Guarantor agrees to pay, and to save
the Purchasers harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and
administration of this Guarantee to the extent the Company would be
required to do so pursuant to the Purchase Agreement.
	 
	 	(iv)	 	The agreements in this Section shall
survive repayment of the Obligations and all other amounts payable
under the Purchase Agreement and the other Transaction Documents.

     (e) Successor and Assigns. This Guarantee shall be binding upon the successors
and assigns of each Guarantor and shall inure to the benefit of the Purchasers and their
respective successors and assigns; provided that no Guarantor may assign, transfer or
delegate any of its rights or obligations under this Guarantee without the prior written
consent of the Purchasers.

     (f) Set-Off. Each Guarantor hereby irrevocably authorizes the Purchasers at
any time and from time to time while an Event of Default under any of the Transaction
Documents shall have occurred and be continuing, without notice to such Guarantor or any
other Guarantor, any such notice being expressly waived by each Guarantor, to set-off and
appropriate and apply any and all deposits, credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Purchasers to or for the credit or the account
of such Guarantor, or any part thereof in such amounts as the Purchasers may elect, against
and on account of the obligations and liabilities of such Guarantor to the Purchasers
hereunder and claims of every nature and description of the Purchasers against such
Guarantor, in any currency, whether arising hereunder, under the Purchase Agreement, any
other Transaction Document or otherwise, as the Purchasers may elect, whether or not the
Purchasers have made any demand for payment and although such obligations, liabilities and
claims may be contingent or unmatured. The Purchasers shall notify such Guarantor promptly
of any such set-off and the application made by the Purchasers of the proceeds thereof,
provided that the

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failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Purchasers under this Section are in addition to other
rights and remedies(including, without limitation, other rights of set-off) which the
Purchasers may have.

     (g) Counterparts. This Guarantee may be executed by one or more of the parties
to this Guarantee on any number of separate counterparts (including by telecopy), and all
of said counterparts taken together shall be deemed to constitute one and the same
instrument.

     (h) Severability. Any provision of this Guarantee which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.

     (i) Section Headings. The Section headings used in this Guarantee are for
convenience of reference only and are not to affect the construction hereof or be taken
into consideration in the interpretation hereof.

     (j) Integration. This Guarantee and the other Transaction Documents represent
the agreement of the Guarantors and the Purchasers with respect to the subject matter
hereof and thereof, and there are no promises, undertakings, representations or warranties
by the Purchasers relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Transaction Documents.

     (k) Governing Law. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
PRINCIPLES OF CONFLICTS OF LAWS.

     (l) Submission to Jurisdictional; Waiver. Each Guarantor hereby
irrevocably and unconditionally:

	 	(i)	 	submits for itself and its property in any
legal action or proceeding relating to this Guarantee and the other
Transaction Documents to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive
general jurisdiction of the Courts of the State of New York, located
in New York County, New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;

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	 	(ii)	 	consents that any such action or proceeding
may be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
	 
	 	(iii)	 	agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of
mail), postage prepaid, to such Guarantor at its address referred to
in the Purchase Agreement or at such other address of which the
Purchasers shall have been notified pursuant thereto;
	 
	 	(iv)	 	agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by
law or shall limit the right to sue in any other jurisdiction; and
	 
	 	(v)	 	waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any
legal action or proceeding referred to in this Section any special,
exemplary, punitive or consequential damages.

     (m) Acknowledgements. Each Guarantor hereby acknowledges that:

	 	(i)	 	it has been advised by counsel in the
negotiation, execution and delivery of this Guarantee and the other
Transaction Documents to which it is a party;
	 
	 	(ii)	 	the Purchasers have no fiduciary
relationship with or duty to any Guarantor arising out of or in
connection with this Guarantee or any of the other Transaction
Documents, and the relationship between the Guarantors, on the one
hand, and the Purchasers, on the other hand, in connection herewith
or therewith is solely that of debtor and creditor; and
	 
	 	(iii)	 	no joint venture is created hereby or by
the other Transaction Documents or otherwise exists by virtue of the
transactions contemplated hereby among the Guarantors and the
Purchasers.

     (n) Additional Guarantors. The Company shall cause each of its subsidiaries
formed or acquired on or subsequent to the date hereof to become a

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Guarantor for all purposes of this Guarantee by executing and delivering an

Assumption Agreement in the form of Annex 1 hereto.

     (o) Release of Guarantors. Subject to Section 2.6, each Guarantor will be
released from all liability hereunder concurrently with the repayment in full of all
amounts owed under the Purchase Agreement, the Debentures and the other Transaction
Documents.

     (p) Seniority. The Obligations of each of the Guarantors hereunder rank senior
in priority to any other Indebtedness (as defined in the Purchase Agreement) of such
Guarantor.

     (q) Waiver of Jury Trial. EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS
HEREOF, THE PURCHASERS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.

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     IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee

to be duly executed and delivered as of the date first above written.

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	[SUBSIDIARY]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

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SCHEDULE 1

GUARANTORS

          The following are the names, notice addresses and jurisdiction of organization of each
Guarantor.

	 	 	 	 	 	 	 
	 

	 	 	 	COMPANY	 	 
	 

	 	JURISDICTION OF
	 	OWNED BY	 	 
	 

	 	INCORPORATION
	 	PERCENTAGE	 	 
	 

	 	 

	 	 

	 	 

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Annex 1 to

SUBSIDIARY GUARANTEE

ASSUMPTION
AGREEMENT, dated as of ___ ___, ___made by ___, a
___corporation (the “Additional Guarantor”), in favor of the Purchasers
pursuant to the Purchase Agreement referred to below. All capitalized terms not defined herein
shall have the meaning ascribed to them in such Purchase Agreement.

W I T N E S S E T H :

     WHEREAS, Hartville Group, Inc., a Nevada corporation (the “Company”) and the
Purchasers have entered into a Securities Purchase Agreement, dated as of July___, 2006 (as
amended, supplemented or otherwise modified from time to time, the “Purchase Agreement”);

     WHEREAS, in connection with the Purchase Agreement, the Company and its Subsidiaries (other
than the Additional Guarantor) have entered into the Subsidiary Guarantee, dated as of July ___,
2006 (as amended, supplemented or otherwise modified from time to time, the “Guarantee”) in
favor of the Purchasers;

     WHEREAS, the Purchase Agreement requires the Additional Guarantor to become a party to the
Guarantee; and

     WHEREAS, the Additional Guarantor has agreed to execute and
deliver this Assumption Agreement in order to become a party to the Guarantee;

NOW, THEREFORE, IT IS AGREED:

     1. Guarantee. By executing and delivering this Assumption Agreement, the Additional
Guarantor, as provided in Section 5(n) of the Guarantee, hereby becomes a party to the Guarantee as
a Guarantor thereunder with the same force and effect as if originally named therein as a Guarantor
and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Guarantor thereunder. The information set forth in Annex 1-A hereto is hereby
added to the information set forth in Schedule 1 to the Guarantee. The Additional Guarantor hereby
represents and warrants that each of the representations and warranties contained in Section 3 of
the Guarantee is true and correct on and as the date hereof as to such Additional Guarantor (after
giving effect to this Assumption Agreement) as if made on and as of such date.

     2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

15

 

          IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	[ADDITIONALGUARANTOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

16EX-10(E)

 

Exhibit 10.(e).

Huntington Bancshares Incorporated

Compensation Committee Resolutions

July 18, 2006

Re:

First Amendment to the 2004 Stock and Long-Term Incentive Plan

WHEREAS, the Board of Directors of Huntington Bancshares Incorporated (the “Corporation”)
previously adopted the 2004 Stock and Long-Term Incentive Plan (the “2004 Stock Plan”), effective
January 1, 2004 for Long-Term Performance Awards with cycles beginning on or after January 1, 2004
and for grants of non-qualified stock options, incentive stock options, restrictive stock,
restrictive stock units, stock appreciation rights, and deferred stock beginning on or after April
27, 2004 (collectively the “Awards”); and

WHEREAS, Section 2.6 defines the term “Cause” as used in the 2004 Stock Plan; and

WHEREAS, Article 18 of the 2004 Stock Plan provides that this Committee may at any time and from
time to time amend the 2004 Stock Plan; and

WHEREAS, this Committee deems it desirable and in the best interests of the Corporation to adopt an
amendment to the 2004 Stock Plan to expand the definition of Cause in Section 2.6 by adding a new
Section 2.6(d) as follows:

The Participant has acted within the course of Participant’s
employment or separation of employment with the Corporation in a
manner that the Corporation deems not to be in the best interest of
the Corporation.

NOW, THEREFORE, BE IT RESOLVED, that Section 2.6 of the 2004 Stock Plan shall be amended and that
the First Amendment to the 2004 Stock Plan, as presented to this Committee and as indicated on
Exhibit A attached hereto, be, and hereby is, adopted and approved effective for all Awards
issued pursuant to the 2004 Stock Plan from and after January 1, 2004.

FURTHER RESOLVED, that the officers of this Corporation be and they hereby are, authorized and
directed to do any and all things and to take any and all action which they deem necessary or
advisable in order to carry out the intent and purpose of these resolutions.

 

 

Exhibit A

First Amendment to The 2004 Stock and Long-Term Incentive Plan

          Effective as of January 1, 2004, Section 2.6 of the 2004 Stock and Long-Term Incentive Plan is
hereby amended by adding a new clause Section 2.6(d) to the definition of “Cause” as follows:

The Participant has acted within the course of Participant’s
employment or separation of employment with the Corporation in a
manner that the Corporation deems not to be in the best interest of
the Corporation.

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