Document:

EXHIBIT 10.10

     

    Exhibit
      10.10

    GUARANTY

    

    THIS
      GUARANTY
      (the
“Guaranty”)
      is
      executed as of September 15, 2005 by Henry Fong, an individual resident in
      Florida (the
      “Guarantor”),
      for
      the
      benefit of Pandora
      Select Partners L.P.,
      a
      British Virgin Islands limited partnership (“Pandora”)
      and
      Whitebox Hedged High Yield Partners, L.P., a British Virgin Islands limited
      partnership ("WHHY").
      Pandora
      and WHHY are referred to herein individually as a "Lender"
      and
      together as the "Lenders".

    

    RECITALS:

    

    A. Equitex,
      Inc., a Delaware corporation (the “Borrower”)
      and
      Lenders have entered into a Purchase Agreement dated as of this date (the
“Purchase
      Agreement”),
      pursuant to which the Lenders are , subject to the terms and conditions thereof,
      each purchasing a secured convertible promissory note (each, a "Note" and
      together, the “Notes”)
      and a
      warrant to purchase shares of common stock of the Company (each, a "Warrant" together,
      the "Warrants")
      in
      consideration of a collective $1,500,000 loan (the "Loan").
      The
      Notes are secured by collateral given by Borrower pursuant to an Amended
      Security Agreement and a Stock Pledge Agreement, each of this date (together,
      the “Security
      Agreements”).
      The
      Purchase Agreement, the Notes, the Warrants and the Security Agreements are
      referred to herein collectively as the “Loan
      Documents”.

    

    B. The
      execution of this Guaranty is a condition precedent to the obligations of each
      Lender to perform its respective obligations under the Purchase Agreement.
      

    

    NOW,
      THEREFORE,
      in
      consideration of each Lender's agreement to purchase its respective Note and
      as
      an inducement to each Lender to do so, Guarantor covenants and agrees with
      each
      Lender, for the benefit of the holder from time to time of the Notes, as
      follows:

    

    ARTICLE
      ONE - REPRESENTATIONS
      AND WARRANTIES

    

    Guarantor
      makes the following representations and warranties which shall be continuing
      representations and warranties until this Guaranty expires in accordance with
      the provisions contained herein:

    

    1.01 Guaranty
      Authorized and Binding.
      The
      execution, delivery and performance of this Guaranty does not require the
      consent or approval of any governmental body or other regulatory authority;
      is
      not in contravention of, or in conflict with, any law or regulation; and this
      Guaranty is a valid and legally binding obligation of Guarantor enforceable
      in
      accordance with its terms.

    

    1.02 No
      Conflict.
      The
      execution and delivery of this Guaranty is not, and the performance of this
      Guaranty will not be, in contravention of, or in conflict with, any agreement,
      indenture or undertaking to which Guarantor is a party or by which Guarantor
      or
      Guarantor's property is or may be bound or affected and do not, and will not
      cause any security interest, lien or other encumbrance to be created or imposed
      upon any such property.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.03
      Litigation.
      There
      is no action, suit or other proceeding pending or, to the knowledge of Guarantor
      threatened, against or affecting Guarantor or Guarantor’s properties which, if
      determined adversely against Guarantor, would have a material adverse effect
      on
      the financial position, properties, assets or businesses of Guarantor or which
      prevents or interferes with or adversely affects Guarantor's entering into
      this
      Guaranty or the validity of this Guaranty or the carrying out of the terms
      hereof. Guarantor is not in default with respect to any order, writ, injunction,
      decree or demand of any court or other governmental or regulatory authority.
      No
      federal or state tax liens have been filed against Guarantor.

    

    1.04 Solvency.
      As of
      the date hereof and after giving effect to the obligations being incurred
      hereby, the Guarantor is and will be Solvent. For purposes of this Guaranty,
      the
      term "Solvent" means, with respect to any person at any time, that at such
      time
      (i) the sum of the debts and liabilities (excluding contingent liabilities)
      of
      such person is not greater than all of the assets of such person at fair
      valuation, (ii) the present fair salable value of the assets of such person
      is
      not less than the amount that will be required to pay the probable liability
      of
      such person on its debts as they become absolute and matured, (iii) such person
      has not incurred debts or liabilities (including, without limitation, contingent
      liabilities) beyond such person's ability to pay as such debts and liabilities
      mature, (iv) such person is not engaged in, and is not about to engage in,
      a
      business or transaction for which such person's property constitutes or would
      constitute unreasonably small capital, and (v) such person is not otherwise
      insolvent as defined in any law that may be applicable to such person pertaining
      to bankruptcy, insolvency or creditors' rights. The Guarantor agrees to notify
      the Lenders immediately of any material adverse change in the financial
      condition of Guarantor. 

    

    1.05 Financial
      or Other Benefit or Advantage.
      Guarantor hereby acknowledges and warrants that Guarantor has derived or expects
      to derive a financial or other benefit or advantage from the Notes and from
      each
      and every renewal, extension, release of collateral or other relinquishment
      of
      legal rights made or granted or to be made or granted by Lenders to Borrower
      in
      connection with the Notes.

    

    ARTICLE
      TWO - AGREEMENTS

    

    2.01 Guaranty.
      Guarantor hereby unconditionally and irrevocably guaranties to each Lender
      the
      full and punctual payment, performance and discharge of all principal and
      interest and other payments due from Borrower under such Lender's respective
      Notes (and all renewals, extensions, modifications and rearrangements thereof)
      that is outstanding from time to time and the due and prompt performance of
      all
      other agreements and obligations of the Borrower under the Loan Documents
      (collectively, the “Guaranteed
      Obligations”) and
      whether or not the Guaranteed Obligations are valid and enforceable against
      the
      Borrower, whenever the Guaranteed Obligations become due, whether on demand,
      at
      maturity or by reason of acceleration, or at the time the Borrower or the
      Guarantor shall become the subject of any bankruptcy or insolvency proceeding.
      This
      is a
      guaranty of payment and performance and not of collection only.

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    2.02 Obligations
      Absolute.
      The
      obligations of Guarantor hereunder shall remain in full force and effect without
      regard to, and shall not be affected or impaired by the following, any of which
      may occur or be taken without the consent of, or notice to, Guarantor, nor
      shall
      any of the following give Guarantor any recourse or right of action against
      Lenders:

    

    (a) Any
      express or implied amendment, modification, renewal, addition, supplement,
      extension (including, without limitation, extensions beyond the original term)
      or acceleration of or to any of the Loan Documents;

    

    (b) Any
      exercise or non-exercise by Lender of any of its respective rights or privileges
      under this Guaranty or any of the Loan Documents;

    

    (c) Any
      bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
      liquidation or other like proceeding relating to Guarantor or Borrower, or
      any
      other guarantor (which term shall include any other party at any time directly
      or contingently liable for any of the Borrower's obligations under the Loan
      Documents or any affiliate of Borrower), or any action taken with respect to
      this Guaranty by any trustee or receiver, or by any court, in any such
      proceeding, whether or not Guarantor shall have had notice or knowledge of
      any
      of the foregoing;

    

    (d) Any
      release or discharge of the Borrower from its liability under any of the Loan
      Documents or any release or discharge of any endorser or other guarantor or
      of
      any other party at any time directly or contingently liable for the Guaranteed
      Obligations or any compromise or settlement by Lender of any of its claims
      against any of them;

    

    (e) Any
      subordination, compromise, release (by operation of law or otherwise),
      discharge, compound, collection, or liquidation of any or all of the collateral
      described in any of the Loan Documents or otherwise in any manner, or any
      substitution with respect thereto;

    

    (f) Any
      assignment or other transfer of this Guaranty in whole or in part or of any
      of
      the Loan Documents;

    

    (g) Any
      acceptance of partial performance of the Guaranteed Obligations;

    

    (h) Any
      consent to the transfer of, or actual transfer of, the collateral or any portion
      thereof described in the Loan Documents or otherwise;

    

    (i) Any
      bid
      or purchase at any sale of any of the collateral described in the Loan Documents
      or otherwise;

    

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    (j) Any
      taking and/or acceptance of any additional guarantees, collateral or security;
      and

    

    (k) Any
      failure to perfect or to continue the perfection of any security.

    

    2.03 Waivers.
      Guarantor unconditionally waives any defense to the enforcement of this
      Guaranty, including, without limitation:

    

    (a)  All
      presentments, demands for performance, notices of nonperformance, protests,
      notices of protest, notices of dishonor, and notices of acceptance of this
      Guaranty;

    

    (b) Any
      right
      to require Lender to proceed against Borrower or any other guarantor at any
      time
      or to proceed against or exhaust any security held by Lender at any time or
      to
      pursue any other remedy whatsoever at any time;

    

    (c) The
      defense of any statute of limitations affecting the liability of Guarantor
      hereunder, the liability of Borrower or any guarantor under the Loan Documents,
      or the enforcement hereof, to the extent permitted by law;

    

    (d) Any
      defense arising by reason of any invalidity or unenforceability of any of the
      Loan Documents or any disability of Borrower or any guarantor or of any manner
      in which Lender has exercised its rights and remedies under the Loan Documents,
      or by any cessation from any cause whatsoever of the liability of Borrower
      or
      any guarantor;

    

    (e) Any
      defense based upon an election of remedies by Lender, including, without
      limitation, any election to proceed by judicial or nonjudicial foreclosure
      of
      any security, whether real property or personal property security, or by deed
      in
      lieu thereof, and whether or not every aspect of any foreclosure sale is
      commercially reasonable, or any election of remedies, including but not limited
      to remedies relating to real property or personal property security, which
      destroys or otherwise impairs the subrogation rights of Guarantor or the rights
      of Guarantor to proceed against Borrower or any other guarantor for
      reimbursement, or both;

    

    (f) Any
      duty
      of Lender to advise Guarantor of any information known to Lender regarding
      the
      financial condition of Borrower or any other guarantor and all other
      circumstances affecting Borrower's or any other guarantor’s ability to perform
      its obligations to Lender, it being agreed that Guarantor assumes the
      responsibility for being and keeping informed regarding such condition or any
      such circumstances; and

    

    (g) Any
      rights of subrogation, reimbursement, exoneration, contribution and indemnity,
      and any rights or claims of any kind or nature against Borrower which arise
      out
      of or are caused by this Guaranty, and any rights to enforce any remedy which
      Lender now has or may hereafter have against Borrower and any benefit of; and
      any right to participate in, any security now or hereafter held by Lender,
      until
      all of the Guaranteed Obligations have been fully paid and
      performed.

    

    
      
        
        

      

      
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    2.04 Subrogation.
      Guarantor understands that the exercise by Lenders of certain rights and
      remedies may affect or eliminate Guarantor's right of subrogation against
      Borrower or any other guarantor and that Guarantor may therefore incur partially
      or totally nonreimbursable liability hereunder. Nevertheless, Guarantor hereby
      authorizes and empowers each Lender, its successors, endorsees and/or assigns,
      to exercise in its or their sole discretion, any rights and remedies, or any
      combination thereof; which may then be available, it being the purpose and
      intent of Guarantor that the obligations hereunder shall be absolute,
      continuing, independent and unconditional under any and all
      circumstances.

    

    2.05 Additional
      Waivers.
      The
      Guarantor shall not be released or discharged, either in whole or in part,
      by
      Lender's failure or delay to (i) perfect or continue the perfection of any
      lien
      or security interest in any collateral which secures the obligations of the
      Borrower, Guarantor or any other guarantor, or (ii) protect the property covered
      by such lien or security interest.

    

    2.06 Independent
      and Separate Obligations.
      The
      obligation of Guarantor hereunder is independent of the obligation of Borrower
      and, in the event of any default hereunder, a separate action or actions may
      be
      brought and prosecuted against Guarantor whether or not Guarantor is the alter
      ego of Borrower and whether or not Borrower is joined therein or a separate
      action or actions are brought against Borrower. The rights of the Lenders
      hereunder shall not be exhausted until all of the Guaranteed Obligations have
      been fully paid and performed.

    

    2.07 Bankruptcy
      No Discharge: Repayments.
      So long
      as any of the Guaranteed Obligations guaranteed hereunder shall be owing to
      Lender, Guarantor shall not, without the prior written consent of such Lender,
      commence or join with any other party in commencing any bankruptcy,
      reorganization or insolvency proceedings of or against Borrower. Guarantor
      understands and acknowledges that by virtue of this Guaranty, Guarantor has
      specifically assumed any and all risks of a bankruptcy or reorganization case
      or
      proceeding with respect to Borrower. As an example and not in any way of
      limitation, a subsequent modification of the Guaranteed Obligations in any
      reorganization case concerning Borrower shall not affect the obligation of
      Guarantor to pay and perform the Guaranteed Obligations in accordance with
      their
      respective original terms. If claim is ever made upon Lender for repayment
      of
      the obligations under the Loan Documents and Lender repays all or any part
      of
      said amount, then, notwithstanding any revocation or termination of this
      Guaranty or the cancellation of the Notes or any other instrument evidencing
      the
      Loan or the Loan Documents, Guarantor shall be and remain jointly and severally
      liable to Lender for the amount so repaid to the same extent as if such amount
      had never originally been received by Lender.

    

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    2.08 Subordination. In
      the
      event any default, or event which upon the giving of notice or the lapse of
      time
      or both could become a default, shall exist in the performance of the Loan
      Documents, any indebtedness of Borrower now or hereafter held by Guarantor
      is
      hereby subordinated to the obligations of Borrower under the Guaranteed
      Obligations. If requested by Lender, such indebtedness shall be collected,
      enforced and received by Guarantor as trustee for Lender and paid over to Lender
      on account of the Loan Documents. However, no such payment shall reduce or
      affect in any manner the absolute, unconditional and independent liability
      of
      Guarantor hereunder except to the extent such payment is applied against the
      Loan.

    

    2.09 Payments.

    

    (a) Guarantor
      agrees that to the extent Borrower makes any payment to Lender in connection
      with the Guaranteed Obligations, and all or any part of such payment is
      subsequently invalidated, declared to be fraudulent or preferential, set aside
      or required to be repaid by Lender and to the extent actually paid over to
      Guarantor or a trustee of; receiver of; or other successor to, Guarantor's
      interest or estate, whether under any bankruptcy act or otherwise (any such
      payment is herein referred to as “Preferential
      Payment”),
      then
      this Guaranty shall continue to be effective or shall be reinstated, as the
      case
      may be, and, to the extent of such payment or repayment by Lender, the
      Guaranteed Obligations or part thereof intended to be satisfied by such
      Preferential Payment shall be revived and continued in full force and effect
      as
      if said Preferential Payment had not been made.

    

    (b) Notwithstanding
      any other provision of this Guaranty to the contrary, Guarantor hereby waives
      any claim or other rights which any Guarantor may now have or hereafter acquire
      against Borrower or any other guarantor of all or any of the Guaranteed
      Obligations under this Guaranty or any other of the Loan Documents (all such
      claims and rights are referred to as “Conditional
      Rights”),
      including, without limitation, any right of subrogation, reimbursement,
      exoneration, contribution, or indemnification, any right to participate in
      any
      claim or remedy of Lender against Borrower or any collateral which Lender now
      has or hereafter acquires, whether or not such claim, remedy or right arises
      in
      equity or under contract, statute or common law, by any payment made hereunder
      or otherwise, including without limitation, the right to take or receive from
      Borrower, directly or indirectly, in cash or other property or by setoff or
      in
      any other manner, payment or security on account of such claim or other rights.
      If, notwithstanding the foregoing provisions, any amount shall be paid to
      Guarantor on account of any Conditional Rights and either (i) such amount is
      paid to Guarantor at any time when the Guaranteed Obligations shall not have
      been paid or performed in full, or (ii) regardless of when such amount is paid
      to Guarantor, any payment made by Borrower to Lender is at any time determined
      to be a Preferential Payment, then such amount paid to Guarantor shall be held
      in trust for the benefit of Lender and shall forthwith be paid to Lender to
      be
      credited and applied upon the Guaranteed Obligations, whether matured or
      unmatured, in such order as Lender, in its sole and absolute discretion, shall
      determine. Notwithstanding the foregoing, Guarantor may pursue any claims
      Guarantor has against Borrower, provided Borrower and Guarantor are not or
      shall
      not come into default under the Loan Documents.

    

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    (c) To
      the
      extent that any of the provisions of this Section 2.09 shall not be enforceable,
      Guarantor agrees that until such time as the Guaranteed Obligations have been
      paid and performed in full and the period of time has expired during which
      any
      payment made by Borrower or Guarantor to Lender may be determined to be a
      Preferential Payment, Guarantor's Conditional Rights to the extent not validly
      waived shall be subordinate to Lender's right to full payment and performance
      of
      the Guaranteed Obligations, and Guarantor shall not enforce Guarantor’s
      Conditional Rights during such period.

    

    2.10 Lender's
      Right of Setoff.
      In
      addition to all liens upon and rights of setoff against the moneys, securities
      or other property of Guarantor given to Lender by law, each Lender shall have,
      with respect to Guarantor's obligations to such Lender under this Guaranty
      and
      to the extent permitted by law, a contractual possessory security interest
      in
      and a right of setoff against, and Guarantor hereby assigns, conveys, delivers,
      pledges, and transfers to such Lender all of Guarantor's right, title and
      interest in and to, all deposits, moneys, securities and other property of
      Guarantor, if any, now or hereafter in the possession of or on deposit with
      such
      Lender, whether held in a general or special account or deposit, whether held
      jointly with someone else, or whether held for safekeeping or otherwise. Every
      such security interest and right of setoff may be exercised without demand
      upon
      or notice to Guarantor. No security interest or right of setoff shall be deemed
      to have been waived by any act or conduct on the part of Lender or by any
      neglect to exercise such right of setoff or to enforce such security interest
      or
      by any delay in so doing. Every right of setoff and security interest shall
      continue in full force and effect until such right of setoff or security
      interest is specifically waived or released by an instrument in writing executed
      by Lender.

    

    ARTICLE
      THREE - MISCELLANEOUS

    

    3.01 Expenses.
      In
      addition to the Guaranteed Obligations, Guarantor agrees to pay all costs and
      expenses, including reasonable attorneys' fees, which may be incurred by each
      Lender in any effort to collect or enforce any of the Loan Documents or the
      obligations of Guarantor hereunder, whether or not any lawsuit is filed,
      including, without limitation, all costs and attorneys' fees incurred by Lender
      in any bankruptcy proceeding (including, without limitation, any action for
      relief from the automatic stay of any bankruptcy proceeding, whether or not
      Lender prevails therein) and in any judicial or nonjudicial foreclosure action.
      Such amounts shall bear interest until paid at a rate equal to 12% per annum,
      or
      if less, the highest rate permitted by law.

    

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    3.02 Amendments;
      Successors.
      Neither
      this instrument nor any term hereof may be changed, waived, discharged or
      terminated orally, but only by an instrument in writing signed by the party
      against which enforcement of the change, waiver, discharge or termination is
      sought. All of the terms of this instrument shall be binding upon and shall
      inure to the benefit of the parties hereto and their respective heirs,
      executors, administrators, personal representatives, successors and assigns.
      In
      the event of the death of any individual person included in the term
“Guarantor,” this Guaranty shall be enforceable as a claim against that
      individual's estate or otherwise against the representatives of the individual's
      estate, the individual's heirs-at-law, the devisees and beneficiaries of the
      individual's total estate and each of them. The term “Borrower” shall mean both
      the named Borrower and any other person or entity at any time assuming or
      otherwise becoming primarily liable on all or any part of the obligations set
      forth in the Loan Documents. No delay or failure by Lender to exercise any
      remedy against Borrower or Guarantor will be construed as a waiver of that
      right
      or remedy. All remedies of each Lender are cumulative and may be exercised
      singly, simultaneously, consecutively and in any order. In the event that the
      provisions of this Guaranty are claimed or held to be inconsistent with any
      other instrument evidencing or securing the Notes, or the obligations of
      Guarantor, the terms of this Guaranty shall remain fully valid and effective.
      Any married person executing this Guaranty agrees that recourse may be had
      against community assets and against such person's separate property for the
      satisfaction of the obligations hereby guaranteed. When the context in which
      the
      words are used in this Guaranty indicates that such is the intent, words in
      the
      singular number shall include the plural and vice-versa. All references to
      “Guarantor” shall be interpreted to include Guarantor. If any one or more of the
      provisions of this Guaranty should be determined to be illegal or unenforceable,
      all other provisions shall remain effective. Guarantor shall not have the right
      to assign any of Guarantor’s rights or obligations under this
      Guaranty.

     

    3.03 Governing
      Law.
      This
      Guaranty shall be governed by and be construed pursuant to the laws of the
      State
      of Minnesota applicable to contracts made and performed in the State of
      Minnesota without reference to any conflict or choice of law rules that would
      otherwise apply. Any suit, action or proceeding arising out of or in connection
      with this Agreement may be brought in the Minnesota District Court for Hennepin
      County, Minnesota, or the United States District Court for the District of
      Minnesota, and the parties hereto irrevocably submit and consent to the
      jurisdiction of each such court and agree that any summons, complaint, writ,
      judgment or other notice or service or legal process may be sufficiently served
      upon it in connection with any such suit, action or proceeding, if sent to
      the
      last known address of the applicable party in accordance with the provisions
      of
Section
      3.07
      hereof.
      The submission to said jurisdiction shall not (and shall not be construed so
      as
      to) limit the right of the Lender to take proceedings against the Guarantor,
      in
      whatsoever jurisdictions shall be appropriate nor shall the taking of
      proceedings in any one or more jurisdictions preclude the taking of proceedings
      in any other jurisdiction, whether concurrently or not.

    

    3.04 Assignability
      by Lender.
      Each
      Lender may, at any time and from time to time, assign, conditionally or
      otherwise, all of the rights of such Lender under its respective Note and under
      this Guaranty, whereupon the assignee shall succeed to all rights of such Lender
      hereunder to the extent that such rights may be assigned to it. Lender, or
      each
      successor holder of the Note, may give written notice to Guarantor of any such
      assignment, but any failure to give, or delay in giving, such notice shall
      not
      affect the validity or enforceability of any such assignment.

    

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    3.05 Demands.
      Each
      demand by Lender for performance or payment hereunder shall be in writing and
      shall be made in the manner set forth in Section 3.07 below. A dated statement
      signed by an officer of Lender setting forth the amount of indebtedness at
      the
      time owing to Lender by Borrower under the Loan Documents shall be presumptive
      evidence thereof (subject to rebuttal) as between Guarantor and Lender in any
      legal proceedings against Guarantor in connection with this
      Guaranty.

    

    3.06  Term.
      The
      obligations of the Guarantor under this Guaranty shall continue in full force
      and effect until the Guaranteed Obligations shall have been fully paid and
      performed and the period of time has expired during which any payment made
      by
      Borrower, Guarantor or any other guarantor to Lender may be determined to be
      a
      Preferential Payment.

    

    3.07 Notices.
      All
      notices, demands, and other communications shall be in writing and shall be
      deemed to have been duly given and effective (i) when delivered if personally
      delivered by hand (with written confirmation of receipt), (ii) when received
      if
      sent by a nationally recognized overnight courier service (receipt requested),
      or (iii) when receipt is acknowledged by the receiving party if delivered via
      facsimile or electronic email, at the following addresses (or at such other
      addresses as shall be given by written notice by any party to the
      others):

    

    

      
        	 	
                To
                  Guarantor:

              	 	
                Henry
                  Fong

                7315
                  East Peakview Avenue

                Englewood,
                  Colorado 80111

                Facsimile:
                  (561) 624-0866

                Email:
                  hfong@equitex.net

              
	 	 	 	 
	 	
                To
                  Lenders, in care of:

              	 	
                Whitebox
                  Advisors, LLC

                3033
                  Excelsior Boulevard, Suite 300

                Minneapolis,
                  Minnesota 55416

                Attention:
                  Jonathan Wood, Chief Financial Officer

                Facsimile:
                  (312) 253-6151

                Email:
                  jwood@whiteboxadvisors.com

              

      

    3.08 Complete
      Agreement.
      This
      Guaranty supersedes any prior negotiations, discussions or communications
      between Guarantor and each Lender and constitutes the entire agreement between
      each Lender and Guarantor with respect to the Guaranteed Obligations. This
      Guaranty may be executed in one or more counterparts, all of which, taken
      together, shall constitute one and the same Guaranty.

    

    [signature
      page follows]

    
 

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    

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

     

    
      	GUARANTOR:	 	 	 
	 	 	 	 
	 	 	 	 
	/s/ Henry
              Fong	 	 	 
	
              
Henry
              Fong	 	 	
            
	Name
Title
More
              Title	 	 	 

    

     

    
      
        
        

      

      -10-Filed by Automated Filing Services Inc. (604) 609-0244 - Infrablue Limited - Exhibit 10.13

EXHIBIT 10.13 

THIS AGREEMENT is made the 1st day of May 2005 

BETWEEN:

(1) Azuracle Limited registered in England under company number
(03836824) whose registered office is at 27 New Bond Street London W1S
2RH (‘Azuracle’); and

(2) Infrablue Limited a company registered in England under
company number (05047525) whose registered office is at 27 New Bond
Street London W1S 2RH (‘Customer’).

WHEREAS:

(A) The Customer’s business concerns the marketing of a
Bluetooth presentation device 

(B) Azuracle has, in consideration of clause 4 of this
agreement agreed to enter into this agreement to provide administrative, legal,
financial, marketing and sales support and advice to the Customer on the
terms set out below 

NOW IT IS AGREED as follows:

1 Definitions and interpretation

1.1 In this agreement unless the context otherwise requires:

	 	‘business day’	means a day, other than a Saturday or Sunday, on
      which banks are open for ordinary banking business in London; 

	 	  	  
	 	‘the Effective Date’ 	means 1st May 2005; 
	 	  	  
	 	‘party’ or ‘parties’
        	references to ‘party’ or ‘parties’
      shall be construed as references to a party or parties to this agreement;
    

	 	  	  
	 	‘the Services’    
    	means the services to be performed by Azuracle for
      the Customer upon the terms of this agreement, a detailed description of
      which is set out in the appendix hereto as amended from time to time; 

	 	  	  
	 	‘value added tax’ and ‘VAT’
          	mean value added tax as provided for in the Value
      Added Tax Act 1994 and legislation supplemental thereto or replacing, modifying
      or consolidating it. 

1.2 References to, or to any provision of, any treaty,
legislation, statute, directive, regulation, judgment, decision, decree, order,
instrument, byelaw, or any other law of, or having effect in, any jurisdiction
(‘Laws’) shall be construed also as references to all other Laws made under the
Law referred to, and to all such Laws as amended, re-enacted, consolidated or
replaced or as their application is modified by other Laws from time to time,
and whether before or after the date of this agreement.

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1.3 References to ‘this agreement’ or to any other agreement or
document referred to in this agreement mean this agreement or such other
agreement or document as amended, varied, supplemented, modified or novated from
time to time, and include the schedules and appendices.

1.4 References to the singular shall include the plural and
vice versa and references to the masculine, the feminine and the neuter shall
include each other such gender.

1.5 References to ‘parties’ are references to the parties to
this agreement, and references to a ‘person’ include any individual, company,
body corporate, corporation sole or aggregate, government, state or agency of a
state, firm, partnership, joint venture, association, organisation or trust (in
each case, whether or not having separate legal personality and irrespective of
the jurisdiction in or under the law of which it was incorporated or exists) and
a reference to any of them shall include a reference to the others.

1.6 References to clauses and the appendix are to clauses of
and the appendix to this agreement. References to this agreement include the
appendix.

1.7 The headings are inserted for convenience only and shall
not affect the construction of this agreement.

2 Duration 

Subject as provided in clause 9, this agreement shall commence
on the Effective Date and continue unless and until terminated by either party
giving to the other not less than one (1) month’s notice in writing. 

3 Provision of the Services

Azuracle shall provide the services to the Customer at
the times and at the places, in the manner and in accordance with the terms set
out in the appendix.

4 Charges 

4.1 The Customer shall pay charges for the Services in the
amounts and at the times set out in the appendix.

4.2 All amounts expressed as payable pursuant to this agreement
are exclusive of any applicable VAT which, where applicable, shall be payable by
the relevant party in addition to the amount in question on production to it of
a valid VAT invoice.

4.3 All sums payable by either party under this agreement shall
be paid free and clear of all withholdings, set-offs or counterclaims
whatsoever, except any deduction or withholding which may be required by law

5 Independent contractor

In performing the services in carrying out its obligations
under this agreement, Azuracle shall act as an independent contractor and not
the agent of the Customer, and neither Azuracle nor any of its directors,
employees or agents shall have any authority to negotiate or enter into
contracts on behalf of or otherwise to bind the Customer except where authorised
expressly in writing).

6 Standard of work

In performing the Services Azuracle shall use reasonable care
and skill, comply with the terms set out in the appendix and with generally
accepted standards of good practice. The said obligations shall replace all
conditions and warranties which would otherwise be implied herein by statute,
common law or otherwise 

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(including, without limit, the Supply of Goods and Services Act
1982) all of which are hereby expressly excluded.

7 Limitation of liability1 

7.1 In respect of those of the Services which are of a
managerial or advisory nature (as identified in the appendix) Azuracle shall not
be liable to the Customer for any loss suffered or liability incurred by
the Customer arising out of any act, omission or error of judgment
(whether or not negligent) which may be committed by Azuracle or by any of its
employees, agents or subcontractors in the course of the provision of those of
the Services except where such loss or liability arises from the negligence,
dishonesty or wilful default of Azuracle or of any of such employees, agents or
subcontractors.

7.3 Nothing in this clause 7 or elsewhere in this agreement
shall exclude, restrict or limit the liability of either party for death or
personal injury caused by that party’s negligence or for fraud.

8 Force majeure 

8.1 If and to the extent that the provision of the Services is
prevented or delayed by force majeure (as defined by clause 8.2 below), Azuracle
shall promptly notify the Customer specifying the nature, extent, effect
and the likely duration of the circumstances constituting the force majeure, and
Azuracle shall then be relieved of any liability for failure to perform or for
delay in performing the Services but shall nevertheless use all reasonable
endeavours to minimise the effect of the force majeure on its performance of its
obligations and to resume full performance of them and shall make such
alternative arrangements for doing so as may be practicable without incurring
material additional expense PROVIDED that if as a result of the force majeure
the Services are not supplied for more than [6] months, the
Customer may terminate this agreement forthwith by notice to Azuracle.
Such a termination notice shall be irrevocable, except with the consent of both
parties.

8.2 For the purposes of this clause 8, ‘force majeure’ means
any circumstances not foreseeable at the date of this agreement and not within
the reasonable control of Azuracle

9 Termination 

9.1 Either party may terminate this agreement forthwith by
notice to the other if the other shall have committed a material breach of this
agreement which is incapable of remedy or (if so capable) is not remedied within
30 days of the party committing the breach having been served with notice by the
other party, specifying the breach and requiring its remedy 

9.2 Upon termination any rights or obligations to which either
of the parties may be entitled or be subject before such termination shall
remain in full force and effect 

10 General 

10.1 Azuracle may subcontract any of its obligations under this
agreement. This agreement shall be binding upon the parties and their successors
and permitted assigns but neither of the parties may assign any of their
respective rights and obligations under this agreement without the prior written
consent of the other

10.2 No exercise or failure to exercise or delay in exercising
any right, power or remedy vested in either party shall constitute a waiver by
that party of that or any other right, power or remedy.

10.3 Nothing in this agreement shall be deemed to constitute a
partnership between the parties nor constitute either party the agent of the
other or otherwise entitle either party to have authority to bind the other
party for any purpose.

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10.4 This agreement, together with any documents referred to in
it, constitutes the entire agreement between the parties in relation to its
subject matter and supersedes and extinguishes any prior agreements and
understandings whether oral or written with respect to it. Each party
acknowledges that it has not been induced to enter into this agreement by any
representation or warranty other than those contained in this agreement and,
having negotiated and freely entered into this agreement, agrees that it shall
have no remedy in respect of any other such representation or warranty except in
the case of fraud. Each party acknowledges that its legal advisers have
explained to it the effect of this clause

10.5. No variation of this agreement shall be effective unless
reduced to writing and signed by or on behalf of a duly authorised
representative of each of the parties.

10.6 In the event that any term, condition or provision of this
agreement is held to be a violation of any applicable law statute or regulation
the same shall be deemed to be deleted from this agreement and shall be of no
force and effect and this agreement shall remain in full force and effect as if
such term, condition or provision had not originally been contained in this
agreement. Notwithstanding the foregoing, in the event of any such deletion the
parties agree to negotiate in good faith in order to agree the terms of a
mutually acceptable and satisfactorily alternative provision in place of the
provision so deleted.

10.7 If any party to this agreement defaults in the payment
when due of any sum payable by it under this agreement, its liability shall be
increased to include interest on such sum from the due date until the date of
actual payment (both before and after judgment) at that annual rate which is 8
percent above the base rate of (Bank of England) from time to time in
effect during such period, and compounded daily.

10.8 No person who is not a party to this agreement shall have
any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any
term of this agreement.

11 Notices 

11.1 Any notice (which term shall in this clause include any
other communication) to be given under this agreement by either party to the
other shall be in writing in the English language.

11.2 Any such notice shall be addressed as provided in clause
11.3 and may be:

	 	11.2.1 	
      personally delivered, in which case it shall be deemed to
      have been given upon delivery at the relevant address if it is delivered
      not later than 17.00 hours on a business day, or, if it is delivered later
      than 17.00 hours on a business day or at any time on a day which is not a
      business day, at 08.00 hours on the next business day; or

	 	 	 
	 	11.2.2 	
      if within the United Kingdom, sent by first class
      pre-paid post, in which case it shall be deemed to have been given 2
      business days after the date of posting; or

	 	 	 
	 	11.2.3 	
      sent by fax, in which case it shall be deemed to have
      been given when despatched, subject to confirmation of uninterrupted
      transmission by a transmission report provided that any notice despatched
      by fax after 17.00 hours on any business day or at any time on a day which
      is not a business day shall be deemed to have been given at 08.00 on the
      next business day; or

	 	 	 
	 	11.2.4 	
      sent by electronic mail, in which case, it shall be
      deemed to be given when received but subject to the same provisions
      regarding receipt after 17.00 hours as apply to notices sent by
  fax.

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11.3 The addresses and other details of the parties referred to
in clause 11.2 are, subject to clause 11.4:

	 	Azuracle 	Name: Blue Khiroya 
	 	  	Address: Suite 5.15, 130 Shaftesbury Ave,
    
	 	  	London, W1D 5EU 
	 	  	Fax: 020 7031 1199 
	 	  	Email: info@azuracle.com 
	 	  	  
	 	Customer 	Name: Mitchell Johnson 
	 	  	Address: Suite 5.15, 130 Shaftesbury Ave,
    
	 	  	London, W1D 5EU 
	 	  	Fax number: 020 7031 1199 
	 	  	Email address: m.johnson@pocket-tech.com 

11.4 Either party may notify the other party of any change to
  the address or any of the other details specified in clause 11.3, provided that
  such notification shall only be effective on the date specified in such notice
  or 5 business days after the notice is given, whichever is later.

12 Law and jurisdiction 

12.1 This agreement shall be governed by, and construed in all
respects in accordance with, English law.

	Signed on behalf of Azuracle:	/s/
        Ulrik Debo 
	   Date 
	  		  
	Signed on behalf of Customer:	/s/ Mitchell Johnson 	   Date: 01/05/05

	APPENDIX 
	 
	 
	THE SERVICES 

  	Rent: Use of office space, desk, chair,
        etc 

        Telephone: Line rental, handset, etc 
Internet: connection,
      bandwidth, etc 	To be charged as it
      arises 
  
  

	Legal:
        Registered office, Company Secretary, Statutory Filing 	To be charged as it arises 
	Finance:
        Book-keeping, Management Accounts, Statutory Accounts 	To be charged as it arises 
	Marketing
        and Sales: Advice and Support 	To be charged as it arises 
	Stationery:
        Basic and Common needs 	To be charged as it arises 
	Meeting
        room: Use of Outlander Management Ltd’s meeting room 	To be charged as it arises 
	IT Service
        Charges 	To be charged as it arises 
	 
                           
                           
                           
                           
                           
                           
                           
                           
         TOTAL   	  

The aforementioned services are the monthly standard
charges.

The following will be charged over and above, as and when used
by the Customer 

	Stationery: unusual and / or expensive items: exact cost will be
  recharged
  
	Couriers: as and when used: exact cost will be recharged
  
	Telephone calls: itemised calls: exact cost will be recharged
  
	Meeting room: cost of MLS rooms: exact cost will be recharged
  
	Misc: should anything else arise, this will be discussed individually,
  and invoiced under mutual agreement 

Azuracle will invoice the Customer monthly for services
provided during the previous month, adding VAT if appropriate. 

Payment shall be due on receipt of invoice, and be made no
later than 7 days of date of invoice. 

The invoice will be sent by way of any method mentioned in
Clause 11.

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