SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY (this
“Subsidiary
Guaranty”), dated as of May 15, 2009, among Wellstar International Inc.,
a Nevada corporation (the “Company”),
Trillennium Medical Imaging, Inc., an Ohio corporation (individually a “Subsidiary Guarantor”
and collectively, the “Subsidiary
Guarantors”), for the benefit of the secured parties signatory hereto and
their respective endorsees, transferees and assigns (individually a “Secured Party” and
collectively, the “Secured
Parties”).
WHEREAS,
the Company and the Subsidiary Guarantors have been, and are now, engaged in
developing and licensing the use of advanced thermal imaging technology in the
consumer health care and veterinary markets throughout the U.S. In
the past, as now, the Company has provided financing for the Subsidiary
Guarantors, and the Subsidiary Guarantors have relied upon the Company to
provide such financing. In addition, it is anticipated that, if the
Subsidiary Guarantors execute and deliver this Subsidiary Guaranty, the Company
will continue to provide such financing to the Subsidiary Guarantors, and that
the proceeds of the Purchase Agreement and Notes will be used, in part,
for the general working capital purposes of the Subsidiary Guarantors;
and
WHEREAS,
in light of the foregoing, each Subsidiary Guarantor expects to derive
substantial benefit from the Purchase Agreement and sale of the Notes and the
transactions contemplated thereby and, in furtherance thereof, has agreed to
execute and deliver this Subsidiary Guaranty.
2. Waiver of
Demand. The Subsidiary Guarantors hereby
unconditionally: (i) waives any requirement that the Secured Parties,
in the event of a breach in any material respect by the Company of any of its
representations or warranties in the Transaction Documents, first make demand
upon, or seek to enforce remedies against, the Company or any other person
before demanding payment of enforcement hereunder; (ii) covenants that this
Subsidiary Guaranty will not be discharged except by complete performance of all
the Obligations; (iii) agrees that this Subsidiary Guaranty shall remain in full
force and effect without regard to, and shall not be affected or impaired,
without limitation, by, any invalidity, irregularity or unenforceability in
whole or in part of the Transaction Documents or any limitation on the liability
of the Company thereunder, or any limitation on the method or terms of payment
thereunder which may now or hereafter be caused or imposed in any manner
whatsoever; and (iv) waives diligence, presentment and protest with respect to,
and notice of default in the performance or payment of any Obligation by the
Company under or in connection with the Transaction Documents.
(a) Unless
and until complete performance of all the Obligations, the Subsidiary Guarantors
shall not be entitled to exercise any right of subrogation to any of the rights
of the Secured Parties against the Company or any collateral security or
guaranty held by the Secured Parties for the payment or performance of the
Obligations, nor shall the Subsidiary Guarantors seek any reimbursement from the
Company in respect of payments made by the Subsidiary Guarantors
hereunder.
(b) In
the extent that the Subsidiary Guarantors shall become obligated to perform or
pay any sums hereunder, or in the event that for any reason the Company is now
or shall hereafter become indebted to the Subsidiary Guarantors, the amount of
such sum shall at all times be subordinate as to lien, time of payment and in
all other respects, to the amounts owing to the Secured Parties under the
Transaction Documents and the Subsidiary Guarantors shall not enforce or receive
payment thereof until all Obligations due to the Secured Parties under the
Transaction have been performed or paid. Nothing herein contained is
intended or shall be construed to give to the Subsidiary Guarantors any right of
subrogation in or under the Transaction Documents, or any right to participate
in any way therein, or in any right, title or interest in the assets of the
Secured Parties.
6. Application of Proceeds;
Release. The proceeds of any sale or enforcement of or against
all or any part of the cash or collateral at the time held by the Secured
Parties hereunder, shall be applied by the Secured Parties first to the payment
of the reasonable costs of any such sale or enforcement, then to the payment of
the principal amount or stated valued (as applicable) of, and interest or
dividends (as applicable) and any other payments due in respect of, the
Obligations. The remainder, if any, shall be paid to the Subsidiary
Guarantors. As used in this Subsidiary Guaranty, “proceeds” shall mean
cash, securities and other property realized in respect of the sale of any
collateral.
(a) The
Subsidiary Guarantors hereby represent and warrant to the Secured Parties
that:
(i) this
Subsidiary Guaranty constitutes a legal, valid and binding obligation of the
Subsidiary Guarantors, enforceable in accordance with its terms.
(ii) the
execution, delivery and performance of this Subsidiary Guaranty and other
instruments contemplated herein will not violate any provision of any order or
decree of any court or governmental instrumentality or of any mortgage,
indenture, contract or other agreement to which the Subsidiary Guarantors are a
party or by which the Subsidiary Guarantors may be bound, and will not result in
the creation or imposition of any lien, charge or encumbrance on, or security
interest in, any of the Subsidiary Guarantors’ properties pursuant to the
provisions of such mortgage, indenture, contract or other
agreement.
(iii) all
representations and warranties relating to it contained in the Purchase
Agreement are true and correct.
(b) The
Company represents and warrants to the Secured Parties that it has no knowledge
that any of the representations or warranties of the Subsidiary Guarantors
herein are incorrect or false in any material respect.
(c) Notice. Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section prior to 6:30 p.m. (New York City time) on a Business
Day (as defined in the Purchase Agreement), (ii) the Business Day after the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile telephone number specified in this Subsidiary Guaranty later than
6:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York
City time) on such date, (iii) the Business Day following the date of mailing,
if sent by nationally recognized overnight courier services, or (iv) upon actual
receipt by the party to whom such notice is required to be given. The
address for such notices and communications shall be as follows:
If
to the Company:
|
Wellstar
International Inc.
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0000
Xxxxxxx Xxxx
|
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Xxxxxxx,
XX 00000
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Attention:
Chief Executive Officer
|
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Telephone:
(000) 000-0000
|
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Facsimile: (000)
000-0000
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With
copies to:
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Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
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00
Xxxxxxxx, 00xx
Xxxxx
|
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Xxx
Xxxx, XX 00000
|
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Attention:
Xxxxxx Xxxxxx, Esq.
|
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Telephone: (000)
000-0000
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Facsimile:
(000) 000-0000
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If
to the Subsidiary Guarantors:
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Trillennium
Medical Imaging, Inc.
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0000
Xxxxxxx Xxxx
|
|
Xxxxxxx,
XX 00000
|
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Attention:
Chief Executive Officer
|
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Telephone:
(000) 000-0000
|
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Facsimile: (000)
000-0000
|
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If
to the Secured Parties:
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AJW
Partners, LLC
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AJW
Partners II, LLC
|
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AJW
Master Fund, Ltd.
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AJW
Master Fund II, Ltd.
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New
Millennium Capital Partners III, LLC
|
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0000
Xxxxxxxx Xxxxxxxxx
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Xxxxx
000
|
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Xxxxxx,
Xxx Xxxx 00000
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Attention: Xxxxx
Xxxxxxxx
|
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Facsimile: 000-000-0000
|
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With
copies to:
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Xxxxxxx
Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
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0000
Xxxxxx Xxxxxx, 00xx
Xxxxx
|
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Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000
|
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Attention: Xxxxxx
X. Xxxxxxxx, Esquire
|
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Facsimile: 000-000-0000
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(g) New York Law to
Govern. This Subsidiary Guaranty shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York without regard to the principals of conflicts of law
thereof. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and Federal courts sitting in the city of New York,
borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court or that such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
COMPANY
|
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WELLSTAR
INTERNATIONAL INC.
|
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By:
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/s/
Xxxx Xxxxxxx
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Xxxx
Xxxxxxx
|
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Chief
Executive Officer
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SUBSIDIARY
GUARANTORS:
|
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TRILLENNIUM
MEDICAL IMAGING, INC.
|
|
By:
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/s/
Xxxx Xxxxxxx
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Xxxx
Antonio
|
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Chief
Executive Officer
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SECURED
PARTIES:
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AJW
PARTNERS, LLC
|
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By:
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SMS
Group, LLC
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By:
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/s/
Xxxxx X. Xxxxxxxx
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Xxxxx
X. Xxxxxxxx
|
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Manager
|
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AJW
PARTNERS II, LLC
|
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By:
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SMS
Group, LLC
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By:
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/s/
Xxxxx X. Xxxxxxxx
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Xxxxx
X. Xxxxxxxx
|
|
Manager
|
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AJW
MASTER FUND, LTD.
|
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By:
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First
Street Manager II, LLC
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By:
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/s/
Xxxxx X. Xxxxxxxx
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Xxxxx
X. Xxxxxxxx
|
|
Manager
|
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AJW
MASTER FUND II, LTD.
|
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By:
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First
Street Manager II, LLC
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By:
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/s/
Xxxxx X. Xxxxxxxx
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Xxxxx
X. Xxxxxxxx
|
|
Manager
|
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NEW
MILLENNIUM CAPITAL PARTNERS III, LLC
|
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By:
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First
Street Manager II, LLC
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By:
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/s/
Xxxxx X. Xxxxxxxx
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Xxxxx
X. Xxxxxxxx
|
|
Manager
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