GUARANTY AGREEMENT
THIS
GUARANTY AGREEMENT (this “Guaranty”)
is
made as of September 28, 2007, by and between MDWERKS
GLOBAL HOLDINGS, INC.,
a
Florida corporation (“Debtor”),
and
VICIS CAPITAL MASTER FUND (“Vicis”),
a
series
of the Vicis Capital Master Trust, a trust formed under the laws of the Cayman
Islands.
RECITALS
A. Debtor
is
either a direct or an indirect wholly-owned subsidiary of MDwerks,
Inc., a
Delaware corporation (“Issuer”).
B. Pursuant
to a Securities Purchase Agreement of even date herewith by and between Vicis
and Issuer (as amended or modified from time to time, the “Securities
Purchase Agreement”),
Issuer has issued to Vicis and Vicis has purchased from Issuer $2,000,000 in
shares of the Issuer’s Series B Convertible Preferred Stock, par value $.001 per
share (the “Preferred
Shares”).
C. It
is a
condition precedent to Vicis’s acquisition of the Preferred Shares that
Guarantor execute and deliver to Vicis a guaranty in the form hereof. This
is
the Guaranty Agreement referred to in the Securities Purchase
Agreement.
AGREEMENTS
In
consideration of the recitals and for other good and valuable consideration,
the
receipt and sufficiency of which are hereby acknowledged, Guarantor hereby
agrees with Vicis as follows:
ARTICLE
I
DEFINITIONS
When
used
in this Guaranty, capitalized terms shall have the meanings specified in the
Securities Purchase Agreement, the preamble, the recitals and as
follows:
Event
of Default.
“Event
of Default” shall have the meaning specified in the Securities Purchase
Agreement.
Guaranty.
“Guaranty” shall mean this Guaranty, as the same shall be amended from time to
time in accordance with the terms hereof.
Law.“Law”
shall mean any federal, state, local or other law, rule, regulation or
governmental requirement of any kind, and the rules, regulations,
interpretations and orders promulgated thereunder.
Obligations.
“Obligations” shall mean (a) the redemption of, and payment of dividends on, the
Preferred Shares, and any renewal, extension or refinancing thereof; and (b)
all
debts, liabilities, obligations, covenants and agreements of Issuer and Debtor
contained in the Transaction Documents.
Person.“Person”
shall mean and include an individual, partnership, corporation, trust,
unincorporated association and any unit, department or agency of
government.
ARTICLE
II
THE
GUARANTY
2.1 The
Guaranty.
Guarantor, for itself, its successors and assigns, hereby unconditionally and
absolutely guarantees to Vicis the full and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of each
of
the Obligations. This is a guaranty of payment and performance and not of
collection.
2.2 Waivers
and Consents.
(a) Guarantor
acknowledges that the obligations undertaken herein involve the guaranty of
obligations of a Person other than Guarantor and, in full recognition of that
fact, Guarantor consents and agrees that Vicis may, to the extent permitted
under the Transaction Documents, at any time and from time to time, without
notice or demand, and without affecting the enforceability or continuing
effectiveness hereof: (i) supplement, modify, amend, extend, renew, accelerate
or otherwise change the time for payment or the other terms of the Obligations
or any part thereof, including without limitation any decrease of the principal
amount thereof or the rate(s) of interest thereon; (ii) supplement, modify,
amend or waive, or enter into or give any agreement, approval or consent with
respect to, the Obligations or any part thereof, or any of the Transaction
Documents or any additional security or guaranties, or any condition, covenant,
default, remedy, right, representation or term thereof or thereunder; (iii)
accept new or additional instruments, documents or agreements in exchange for
or
relative to any of the Transaction Documents or the Obligations or any part
thereof; (iv) accept partial payments on the Obligations; (v) receive and hold
additional security or guaranties for the Obligations or any part thereof;
(vi)
release, reconvey, terminate, waive, abandon, fail to perfect, subordinate,
exchange, substitute, transfer and/or enforce any security or guaranties, and
apply any security and direct the order or manner of sale thereof as Vicis
in
its sole and absolute discretion may determine; (vii) release any Person from
any personal liability with respect to the Obligations or any part thereof;
(viii) settle, release on terms satisfactory to Vicis or by operation of
applicable Law or otherwise, liquidate or enforce any Obligations and any
security or guaranty in any manner, consent to the transfer of any security
and
bid and purchase at any sale; and/or (ix) consent to the merger, change or
any
other restructuring or termination of the corporate existence of Issuer or
any
other Person, and correspondingly restructure the Obligations, and any such
merger, change, restructuring or termination shall not affect the liability
of
Guarantor or the continuing effectiveness hereof, or the enforceability hereof
with respect to all or any part of the Obligations.
(b) Upon
the
occurrence and during the continuance of any Event of Default, Vicis may enforce
this Guaranty independently of any other remedy, guaranty or security Vicis
at
any time may have or hold in connection with the Obligations, and it shall
not
be necessary for Vicis to marshal assets in favor of Issuer, any other guarantor
of the Obligations or any other Person or to proceed upon or against and/or
exhaust any security or remedy before proceeding to enforce this Guaranty.
Guarantor expressly waives any right to require Vicis, upon the occurrence
and
during the continuance of an Event of Default, to marshal assets in favor of
Issuer or any other Person or to proceed against Issuer or any other guarantor
of the Obligations or any collateral provided by any Person, and agrees that
Vicis may proceed against any obligor and/or the collateral in such order as
it
shall determine in its sole and absolute discretion. Vicis may file a separate
action or actions against Guarantor, whether action is brought or prosecuted
with respect to any security or against any other Person, or whether any other
Person is joined in any such action or actions. Guarantor agrees that Vicis
and
Issuer may deal with each other in connection with the Obligations or otherwise,
or alter any contracts or agreements now or hereafter existing between them,
in
any manner whatsoever, all without in any way altering or affecting the security
of this Guaranty.
-2-
(c) The
rights of Vicis hereunder shall be reinstated and revived, and the
enforceability of this Guaranty shall continue, with respect to any amount
at
any time paid on account of the Obligations which thereafter shall be required
to be restored or returned by Vicis upon the bankruptcy, insolvency or
reorganization of any Person, all as though such amount had not been paid.
The
rights of Vicis created or granted herein and the enforceability of this
Guaranty shall remain effective at all times to guarantee the full amount of
all
the Obligations even though the Obligations, including any part thereof or
any
other security or guaranty therefor, may be or hereafter may become invalid
or
otherwise unenforceable as against Issuer or any other guarantor of the
Obligations and whether or not Issuer or any other guarantor of the Obligations
shall have any personal liability with respect thereto.
(d) To
the
extent permitted by applicable law, Guarantor expressly waives any and all
defenses now or hereafter arising or asserted by reason of: (i) any disability
or other defense of Issuer or any other guarantor for the Obligations with
respect to the Obligations (other than full payment and performance of all
of
the Obligations); (ii) the unenforceability or invalidity of any security for
or
guaranty of the Obligations or the lack of perfection or continuing perfection
or failure of priority of any security for the Obligations; (iii) the
cessation for any cause whatsoever of the liability of Issuer or any other
guarantor of the Obligations (other than by reason of the full payment and
performance of all Obligations); (iv) any failure of Vicis to marshal assets
in
favor of Issuer or any other Person; (v) any failure of Vicis to give notice
of
sale or other disposition of collateral to Issuer or any other Person liable
for
the Obligations or any defect in any notice that may be given in connection
with
any sale or disposition of collateral; (vi) any failure of Vicis to comply
with
applicable Laws in connection with the sale or other disposition of any
collateral or other security for any Obligation, including, without limitation,
any failure of Vicis to conduct a commercially reasonable sale or other
disposition of any collateral or other security for any Obligation; (vii) any
act or omission of Vicis or others that directly or indirectly results in or
aids the discharge or release of Issuer or any other guarantor of the
Obligations, or of any security or guaranty therefor by operation of Law or
otherwise; (viii) any failure of Vicis to file or enforce a claim in any
bankruptcy or other proceeding with respect to any Person; (ix) the election
by
Vicis, in any bankruptcy proceeding of any Person, of the application or
non-application of Section 1111(b)(2) of the United States Bankruptcy Code;
(x)
any extension of credit or the grant of any lien under Xxxxxxx 000 xx xxx Xxxxxx
Xxxxxx Bankruptcy Code; (xi) any use of collateral under Section 363 of the
United States Bankruptcy Code; (xii) any agreement or stipulation with respect
to the provision of adequate protection in any bankruptcy proceeding of any
Person; (xiii) the avoidance of any lien or security interest in favor of Vicis
for any reason; (xiv) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding commenced by or
against any Person, including without limitation any discharge of, or bar or
stay against collecting, all or any of the Obligations (or any interest thereon)
in or as a result of any such proceeding; or (xv) any action taken by Vicis
that
is authorized by this Section or any other provision of any Transaction
Document. Until all of the Obligations have been paid in full, Guarantor
expressly waives all presentments, demands for payment or performance, notices
of nonpayment or nonperformance, protests, notices of protest, notices of
dishonor and all other notices or demands of any kind or nature whatsoever
with
respect to the Obligations, and all notices of acceptance of this Guaranty
or of
the existence, creation or incurrence of new or additional
Obligations.
-3-
2.3 Condition
of Issuer.
Guarantor represents and warrants to Vicis that it has established adequate
means of obtaining from Issuer, on a continuing basis, financial and other
information pertaining to the business, operations and condition (financial
and
otherwise) of Issuer and its assets and properties. Guarantor hereby expressly
waives and relinquishes any duty on the part of Vicis (should any such duty
exist) to disclose to Guarantor any matter, fact or thing related to the
business, operations or condition (financial or otherwise) of Issuer or its
assets or properties, whether now known or hereafter known by Vicis during
the
life of this Guaranty. With respect to any of the Obligations, Vicis need not
inquire into the powers of Issuer or agents acting or purporting to act on
its
behalf, and all Obligations made or created in good faith reliance upon the
professed exercise of such powers shall be guaranteed hereby.
2.4 Continuing
Guaranty.
This is
a continuing guaranty and shall remain in full force and effect as to all of
the
Obligations until all amounts owing by Issuer to Vicis on the Obligations shall
have been paid in full.
2.5 Subrogation;
Subordination.
Guarantor expressly subordinates and postpones any claim for reimbursement,
contribution, indemnity or subrogation which Guarantor may have against Issuer
as a guarantor of the Obligations and any other legal or equitable claim against
Issuer arising out of the payment of the Obligations by Guarantor or from the
proceeds of any collateral for this Guaranty, until all amounts owing to Vicis
under the Obligations shall have been paid in full. In furtherance, and not
in
limitation, of the foregoing waiver, until all amounts owing to Vicis under
the
Obligations shall have been paid in full, Guarantor hereby agrees that no
payment by Guarantor pursuant to this Guaranty shall constitute Guarantor a
creditor of Issuer. Until all amounts owing to Vicis under the Obligations
shall
have been paid in full, Guarantor shall not seek any reimbursement from Issuer
in respect of payments made by Guarantor in connection with this Guaranty,
or in
respect of amounts realized by Vicis in connection with any collateral for
the
Obligations, and Guarantor expressly subordinates and postpones any right to
enforce any remedy that Vicis now has or hereafter may have against any other
Person and waives the benefit of, or any right to participate in, any collateral
now or hereafter held by Vicis. No claim which any Guarantor may have against
any other guarantor of any of the Obligations or against Issuer, to the extent
not subordinated and postponed pursuant to this Section, shall be enforced
nor
any payment accepted until the Obligations are paid in full.
-4-
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF GUARANTOR
Guarantor
hereby represents and warrants to Vicis as follows:
3.1 Authorization.
Guarantor is a corporation duly and validly organized and existing under the
laws of the State of Florida, has the corporate power to own its owned assets
and properties and to carry on its business, and is duly licensed or qualified
to do business in all jurisdictions in which failure to do so would have a
material adverse effect on its business or financial condition. The making,
execution, delivery and performance of this Guaranty, and compliance with its
terms, have been duly authorized by all necessary corporate action of
Guarantor.
3.2 Enforceability.
This
Guaranty is the legal, valid and binding obligation of Guarantor, enforceable
against Guarantor in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or
other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.
3.3 Absence
of Conflicting Obligations.
The
making, execution, delivery and performance of this Guaranty, and compliance
with its terms, do not violate any existing provision of Law; the articles
of
incorporation or bylaws of Guarantor; or any material agreement or instrument
to
which Guarantor is a party or by which it or any of its assets is
bound.
3.4 Consideration
for Guaranty.
Guarantor acknowledges and agrees with Vicis that but for the execution and
delivery of this Guaranty by Guarantor, Vicis would not have acquired the
Preferred Shares. Guarantor acknowledges and agrees that the proceeds of the
sale of the Preferred Shares will result in significant benefit to Guarantor,
which is either a direct or an indirect wholly-owned subsidiary of Issuer and
or
intended beneficiary of such proceeds.
ARTICLE
IV
COVENANTS
OF THE GUARANTOR
4.1 Actions
by Guarantor.
Guarantor shall not take or permit any act, or omit to take any act, that would:
(a) cause Issuer to breach any of the Obligations; (b) intentionally impair
the
ability of Issuer to perform any of the Obligations; or (c) cause an Event
of
Default under the Securities Purchase Agreement.
4.2 Reporting
Requirements.
To the
extent not disclosed by Issuer in reports required to be filed with the
Commission pursuant to the Exchange Act, Guarantor shall furnish, or cause
to be
furnished, to Vicis such information respecting the business, assets and
financial condition of Guarantor as Vicis may reasonably request in
writing.
-5-
ARTICLE
V
MISCELLANEOUS
5.1 Expenses
and Attorneys’ Fees.
Guarantor shall pay all reasonable fees and expenses incurred by Vicis,
including the reasonable, documented fees of counsel, in connection with the
protection or enforcement of its rights under this Guaranty, including without
limitation the protection and enforcement of such rights in any bankruptcy,
reorganization or insolvency proceeding involving Issuer or Guarantor, both
before and after judgment.
5.2 Revocation.
This is
a continuing guaranty and shall remain in full force and effect until Vicis
receives written notice of revocation signed by Guarantor. Upon revocation
by
written notice, this Guaranty shall continue in full force and effect as to
all
Obligations contracted for or incurred before revocation, and as to them Vicis
shall have the rights provided by this Guaranty as if no revocation had
occurred. Any renewal, extension, or increase in the interest rate(s) of any
such Obligation, whether made before or after revocation, shall constitute
an
Obligation contracted for or incurred before revocation. Obligations contracted
for or incurred before revocation shall also include credit extended after
revocation pursuant to commitments made before revocation.
5.3 Assignability;
Successors.
Guarantor’s rights and liabilities under this Guaranty are not assignable or
delegable, in whole or in part, without the prior written consent of Vicis.
The
provisions of this Guaranty shall be binding upon Guarantor, its successors
and
permitted assigns and shall inure to the benefit of Vicis, its successors and
assigns.
5.4 Survival;
Termination.
All
agreements, representations and warranties made herein or in any document
delivered pursuant to this Guaranty shall survive the execution and delivery
of
this Guaranty and the delivery of any such document. This
Guaranty automatically shall terminate upon the satisfaction of the Obligations,
whether by Issuer, Guarantor or any other Person, and thereafter Guarantor
shall
have no further liability or obligations hereunder. Upon the termination of
this
Guaranty, Vicis shall execute and deliver to Guarantor an acknowledgment of
the
termination of this Guaranty and a release of Guarantor from all claims of
any
nature arising under this Guaranty.
5.5 Governing
Law.
This
Guaranty and the documents issued pursuant to this Guaranty shall be governed
by, and construed and interpreted in accordance with, the Laws of the State
of
New York applicable to contracts made and wholly performed within such
state.
5.6 Execution;
Headings.
This
Guaranty may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of
the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original thereof.
The article and section headings in this Guaranty are inserted for convenience
of reference only and shall not constitute a part hereof.
-6-
5.7 Notices.
All
notices, requests and demands to or upon Vicis or Guarantor (to be delivered
care of Issuer) shall be delivered in the manner set forth in Section 12.6
of
the Securities Purchase Agreement.
5.8 Amendment.
No
amendment of this Guaranty shall be effective unless in writing and signed
by
Guarantor and Vicis.
5.9 Severability.
Any
provision of this Guaranty that 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 of this Guaranty in such jurisdiction or affecting the validity
or
enforceability of any provision in any other jurisdiction.
5.10 Taxes.
If any
transfer or documentary taxes, assessments or charges levied by any governmental
authority shall be payable by reason of the execution, delivery or recording
of
this Guaranty, Guarantor shall pay all such taxes, assessments and charges,
including interest and penalties, and hereby indemnifies Vicis against any
liability therefor.
5.11 WAIVER
OF RIGHT TO JURY TRIAL.
EACH
OF
THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF ANY
CONTROVERSY THAT MAY ARISE UNDER THIS GUARANTY.
5.12 SUBMISSION
TO JURISDICTION; SERVICE OF PROCESS.
(a) EACH
OF
THE PARTIES TO THIS GUARANTY HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS
TO
THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED THE STATE
AND
COUNTY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS GUARANTY. EACH OF THE PARTIES TO THIS GUARANTY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT SUCH PARTY
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN ANY SUCH COURTS AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN
ANY
SUCH COURTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(b) EACH
OF
THE PARTIES TO THIS GUARANTY HEREBY CONSENTS TO SERVICE OF PROCESS BY NOTICE
IN
THE MANNER SPECIFIED IN SECTION 12.6 OF THE SECURITIES PURCHASE AGREEMENT
AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
SUCH PARTY MAY NOW OR HEREAFTER HAVE TO SERVICE OF PROCESS IN SUCH
MANNER..
(signature
page follows)
-7-
IN
WITNESS WHEREOF the undersigned has executed this Guaranty as of the day and
year first above written.
| MDWERKS GLOBAL HOLDINGS, INC. | ||
| |
|
|
| By: | /s/ Xxxxxx X. Xxxx | |
|
Name: Xxxxxx
X. Xxxx
Title: Chief
Executive Officer
|
||
Signature
Page to Guaranty
ACCEPTANCE
BY VICIS
This
Guaranty Agreement is accepted by Vicis Capital Master Fund.
|
VICIS CAPITAL MASTER FUND
By: Vicis Capital LLC
|
||
| |
|
|
| By: | /s/ Xxxxx X. Xxxxxx | |
|
Name:
Xxxxx X. Xxxxxx
Title:
Chief Financial
Officer
|
||
Acceptance
Page to Guaranty
