GUARANTY AGREEMENT
THIS
GUARANTY AGREEMENT (this “Guaranty”)
is
made as of November 14, 2008, by and between XENI
MEDICAL SYSTEMS, INC.,
a
Delaware corporation (“Guarantor”),
and
DEBT OPPORTUNITY FUND, LLLP, a limited liability limited partnership
organized under the laws of the State of Florida (the “Lender”).
RECITALS
A. Guarantor
is either a direct or an indirect wholly-owned subsidiary of MDwerks, Inc.,
a
Delaware corporation (“MDwerks”).
B. Pursuant
to a Loan and Securities Purchase Agreement of even date herewith by and between
Lender, MDwerks, and Xeni Financial Services, Corp. (together with MDwerks,
the
“Borrowers”), a Florida corporation (as amended or modified from time to time,
the “Loan
Agreement”),
the
Borrowers borrowed up to $10,300,000 from Lender (the “Loan”)
evidenced by the issuance of a Senior Secured Promissory Note in the form
attached thereto (the “Note”).
C. It
is a
condition precedent to the Loan that Guarantor execute and deliver to Lender
a
guaranty in the form hereof. This is one of the Guaranty Agreements referred
to
in the Loan 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 Lender as follows:
ARTICLE
I
DEFINITIONS
When
used
in this Guaranty, capitalized terms shall have the meanings specified in the
Loan Agreement, the preamble, the recitals and as follows:
Event
of Default.
“Event
of Default” shall have the meaning specified in the Loan 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) all obligations under the Note, including, without
limitation, all principal, interest, costs, expenses and other amounts now
or
hereafter due under the Note (including, without limitation, all principal
amounts advanced thereunder before, on or after the date hereof) and (b) all
debts, liabilities, obligations, covenants and agreements of the Borrowers
or
Guarantor arising from or 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 Lender 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 Lender 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 Lender
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 Lender 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 a Borrower
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, Lender may
enforce this Guaranty independently of any other remedy, guaranty or security
Lender at any time may have or hold in connection with the Obligations, and
it
shall not be necessary for Lender to marshal assets in favor of a Borrower,
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 Lender, upon the
occurrence and during the continuance of an Event of Default, to marshal assets
in favor of a Borrower or any other Person or to proceed against a Borrower
or
any other guarantor of the Obligations or any collateral provided by any Person,
and agrees that Lender may proceed against any obligor and/or the collateral
in
such order as it shall determine in its sole and absolute discretion. Lender
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 Lender and Borrowers 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.
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(c) The
rights of Lender 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 Lender upon the bankruptcy, insolvency or
reorganization of any Person, all as though such amount had not been paid.
The
rights of Lender 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 Borrowers or any other guarantor of the
Obligations and whether or not any Borrower 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 any Borrower 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 any Borrower or any
other
guarantor of the Obligations (other than by reason of the full payment and
performance of all Obligations); (iv) any failure of Lender to marshal assets
in
favor of any Borrower or any other Person; (v) any failure of Lender to give
notice of sale or other disposition of collateral to any Borrower 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
Lender 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 Lender to conduct a commercially reasonable
sale or other disposition of any collateral or other security for any
Obligation; (vii) any act or omission of Lender or others that directly or
indirectly results in or aids the discharge or release of any Borrower or any
other guarantor of the Obligations, or of any security or guaranty therefor
by
operation of Law or otherwise; (viii) any failure of Lender to file or enforce
a
claim in any bankruptcy or other proceeding with respect to any Person; (ix)
the
election by Lender, 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 Lender 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 Lender 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.
2.3 Condition
of Borrowers.
Guarantor represents and warrants to Lender that it has established adequate
means of obtaining from the Borrowers, on a continuing basis, financial and
other information pertaining to the business, operations and condition
(financial and otherwise) of any Borrower and its assets and properties.
Guarantor hereby expressly waives and relinquishes any duty on the part of
Lender (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 any Borrower or its assets or properties, whether now known or hereafter
known by Lender during the life of this Guaranty. With respect to any of the
Obligations, Lender need not inquire into the powers of any Borrower 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.
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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 Borrowers to Lender 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 a
Borrower as a guarantor of the Obligations and any other legal or equitable
claim against a Borrower 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 Lender under the Obligations shall have been paid in full.
In
furtherance, and not in limitation, of the foregoing waiver, until all amounts
owing to Lender 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 Borrower. Until all amounts owing to Lender
under the Obligations shall have been paid in full, Guarantor shall not seek
any
reimbursement from any Borrower in respect of payments made by Guarantor in
connection with this Guaranty, or in respect of amounts realized by Lender
in
connection with any collateral for the Obligations, and Guarantor expressly
subordinates and postpones any right to enforce any remedy that Lender 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 Lender. No
claim which any Guarantor may have against any other guarantor of any of the
Obligations or against any Borrower, 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.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF GUARANTOR
Guarantor
hereby represents and warrants to Lender as follows:
3.1 Authorization.
Guarantor is a corporation duly and validly organized and existing under the
laws of the State of Delaware, 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, subject
to the consent of Vicis Capital Master Fund being obtained.
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3.4 Consideration
for Guaranty.
Guarantor acknowledges and agrees with Lender that but for the execution and
delivery of this Guaranty by Guarantor, Lender would not made the Loan to the
Borrowers. Guarantor acknowledges and agrees that the proceeds of the Loan
will
result in significant benefit to Guarantor, which is either a direct or an
indirect wholly-owned subsidiary of MDwerks 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 a Borrower to breach any of the Obligations; (b) intentionally impair
the ability of a Borrower to perform any of the Obligations; or (c) cause an
Event of Default under the Loan Agreement.
4.2 Reporting
Requirements.
To the
extent not disclosed by MDwerks in reports required to be filed with the
Commission pursuant to the Exchange Act, Guarantor shall furnish, or cause
to be
furnished, to Lender such information respecting the business, assets and
financial condition of Guarantor as Lender may reasonably request in
writing.
ARTICLE
V
MISCELLANEOUS
5.1 Expenses
and Attorneys’ Fees.
Guarantor shall pay all reasonable fees and expenses incurred by Lender,
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 a Borrower or Guarantor,
both
before and after judgment.
5.2 Revocation.
This is
a continuing guaranty and shall remain in full force and effect until Lender
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 Lender
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 Lender.
The
provisions of this Guaranty shall be binding upon Guarantor, its successors
and
permitted assigns and shall inure to the benefit of Lender, 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 a Borrower,
Guarantor or any other Person, and thereafter Guarantor shall have no further
liability or obligations hereunder. Upon the termination of this Guaranty,
Lender 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.
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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.
5.7 Notices.
All
notices, requests and demands to or upon Lender or Guarantor (to be delivered
care of Borrowers) shall be delivered in the manner set forth in Section 12.6
of
the Loan Agreement.
5.8 Amendment.
No
amendment of this Guaranty shall be effective unless in writing and signed
by
Guarantor and Lender.
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 Lender 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 LOAN 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]
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IN
WITNESS WHEREOF the undersigned has executed this Guaranty as of the day and
year first above written.
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XENI
MEDICAL SYSTEMS, INC.
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By:
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/s/ Xxxxxx X. Xxxx
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Name:
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Xxxxxx
X. Xxxx
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Title:
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Chief
Executive Officer
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ACCEPTANCE
BY LENDER
This
Guaranty Agreement is accepted by Debt Opportunity Fund, LLLP.
| DEBT OPPORTUNITY FUND, LLLP, | ||
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a
Florida limited liability limited partnership
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By:
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Total
Capital Management, LLC,
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a
Florida limited liability company,
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as
its General Partner
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By:
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/s/
Xxxx Xxxxx
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Name:
Xxxx Xxxxx
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Title:
Manager
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