Exhibit 10.7
GUARANTY AGREEMENT
This Guaranty Agreement ("Agreement") is made effective this
16th day of July, 2002, ("Effective Date") and is entered into by XXXXXX X.
XXXXXX (herein referred to as "Guarantor") for the benefit of BIO-AMERICAN
CAPITAL CORP., a Nevada corporation ("herein" referred to as "Company")
RECITALS:
A. Company has issued certain Secured Promissory Notes (the
"Notes") in connection with an aggregate $160,000.00 loan by Humboldt Capital
Corporation and Xxxxxxx Xxxx to the Company to serve as bridge financing to
acquire the Xxxxxxxxx and Xxxx Oil and Gas Leases and the Xxxxxx Mineral
Interests in the Raton Basin, Colfax County New Mexico and Las Animas County,
Colorado, which loan terms include repayment in 90 days with ten percent (10%)
interest for the period and issuance of one warrant to purchase Company Common
Stock at $0.40 for each dollar of principal advanced.
B. Company has conditioned the execution of the Notes and
issuance of the Warrants upon the execution of this Agreement by Guarantor.
TERMS OF AGREEMENT:
NOW, THEREFORE, FOR VALUE RECEIVED, the receipt and
sufficiency of which are hereby acknowledged, subject to and upon the following
terms, the undersigned Guarantor hereby irrevocably and unconditionally:
(a) guarantees to Company the prompt payment and performance
of any and all indebtednesses of Borrower evidenced by or created under
the Notes (the "Guaranteed Indebtedness").
(b) guarantees and agree to perform fully and promptly when
due all of the covenants, agreements and other obligations undertaken
by Borrower in the Notes or related documents (such covenants,
agreements and other obligations are hereinafter called the
"Obligations"); and
(c) guarantees and agree to pay any and all costs, attorneys'
fees and expenses incurred or expended by Company in collecting or
enforcing or attempting to collect or enforce any of the Guaranteed
Indebtedness or due to any default in the performance of the
Obligations or in enforcing or attempting to enforce any right granted
hereunder.
GUARANTY AGREEMENT
------------------
2. This Agreement shall be an absolute, continuing, irrevocable, and
unconditional guaranty of payment and performance and not a guaranty of
collection, and Guarantor shall remain liable on its obligations hereunder until
the payment and performance in full of the Guaranteed Indebtedness and the
Obligations. Guarantor hereby acknowledges and agrees that the Supply Agreement,
each Loan Document and this Agreement are cross-collateralized and
cross-defaulted, such that a default by Borrower under the Supply Agreement or
any Loan Document constitutes a default by Borrower under all other documents
executed by Borrower, thereby entitling Company to exercise any and all remedies
under such documents or under applicable law and to further exercise any and all
remedies under this Agreement, in its sole discretion, as if Borrower was then
in default of each such document. Guarantor acknowledges and agrees that upon
such a default by Borrower under any of the cross-collateralized and
cross-defaulted Supply Agreement and Loan Documents, Company shall have the
right to accelerate all sums due and owing to Company by Borrower under such
documents and to seek recovery of all such accelerated sums from Guarantor as
the Guaranteed Indebtedness.
3. If Guarantor becomes liable for any indebtedness owing by Borrower
to Company by endorsement or otherwise, other than under this Agreement, such
liability shall not be in any manner impaired or affected hereby, and the rights
of Company hereunder shall be cumulative of any and all other rights that
Company may ever have against Guarantor. The exercise by Company of any right or
remedy hereunder or under any other instrument, or at law or in equity, shall
not preclude the concurrent or subsequent exercise of any other right or remedy.
4. In the event of default by Borrower in payment or performance of the
Guaranteed Indebtedness or the Obligations, or any part thereof, when such
Guaranteed Indebtedness, or any part thereof becomes due, whether by its terms,
by acceleration, or otherwise, Guarantor shall promptly pay the amount due
thereon to Company without notice or demand in lawful currency of the United
States and it shall not be necessary for Company, in order to enforce such
payment by Guarantor, first to institute suit or exhaust its remedies against
Borrower or others liable on such Guaranteed Indebtedness or Obligations, or to
enforce any rights against any collateral which shall ever have been given to
secure such Guaranteed Indebtedness or Obligations. In the event such payment is
made by Guarantor, then Guarantor shall be subrogated to the rights then held by
Company with respect to the Guaranteed Indebtedness to the extent to which the
Guaranteed Indebtedness was discharged by Guarantor and, in addition, upon
payment by Guarantor of any sums to Company hereunder, all rights of Guarantor
against Borrower arising as a result therefrom by way of right of subrogation,
reimbursement, or otherwise shall in all respects be subordinate and junior in
right of payment to the prior indefeasible payment in full of the Guaranteed
Indebtedness and performance of the Obligations.
5. Guarantor hereby agrees that his obligations under this Agreement
shall not be released, diminished, impaired, reduced, or affected by the
occurrence of any reason or event, including, without limitation, one or more of
the following events, whether or not with notice to or the consent of Guarantor:
(a) the taking or accepting of collateral as security for any or all of the
Guaranteed Indebtedness or the Obligations or the release, surrender, exchange,
or subordination of any collateral now or hereafter securing any or all of the
Guaranteed Indebtedness or the Obligations; (b) any partial release of the
liability of Guarantor hereunder, or the release of any other guarantor from
liability for any or all of the Guaranteed Indebtedness or the Obligations; (c)
any disability of Borrower, or the dissolution, insolvency, or bankruptcy of
Borrower, Guarantor, or any party at any time liable for the payment of any or
all of the Guaranteed Indebtedness or the performance of the Obligations; (d)
any renewal, extension, modification, waiver, amendment, or rearrangement of any
or all of the Guaranteed Indebtedness or the Obligations or any instrument,
document, or agreement evidencing, securing, or otherwise relating to any or all
of the Guaranteed Indebtedness or the Obligations; (e) any adjustment,
indulgence, forbearance, waiver, or compromise that may be granted or given by
Company to Borrower, Guarantor, or any other party ever liable for any or all of
the Guaranteed Indebtedness or the performance of the Obligations; (f) any
neglect, delay, omission, failure, or refusal of Company to take or prosecute
any action for the collection of any of the Guaranteed Indebtedness or the
Obligations or to foreclose or take or prosecute any action in connection with
any instrument, document, or agreement evidencing, securing, or otherwise
relating to any instrument, document, or agreement evidencing, securing, or
otherwise relating to any or all of the Guaranteed Indebtedness or the
Obligations; (g) the unenforceability or invalidity of any or all of the
Guaranteed Indebtedness or the Obligations or any instrument, document, or
agreement evidencing, securing, or otherwise relating to any or all of the
Guaranteed Indebtedness or the Obligations; (h) any payment by Borrower to
Company which is held to constitute a preference under the bankruptcy laws or if
for any other reason Company is required to refund such payment or pay the
amount thereof to someone else; (i) the settlement or compromise of any of the
Guaranteed Indebtedness or the Obligations; (j) the failure of Company to
perfect or continue any security interest or lien securing any or all of the
Guaranteed Indebtedness or the Obligations; (k) the failure of Company to
preserve, protect, maintain, or insure any collateral securing any or all of the
Guaranteed Indebtedness or the Obligations; (l) the failure of Company to sell
any collateral securing any or all of the Guaranteed Indebtedness or the
Obligations in a commercially reasonable manner or as otherwise required by law;
or (m) any other circumstance which might otherwise constitute a defense
available to, or discharge of, Borrower or Guarantor.
6. Guarantor represents and warrants to Company as follows:
(a) Guarantor has the power and authority to execute,
deliver and perform its obligations under this Agreement
and this Agreement constitutes the legal, valid and
binding obligation of Guarantor, enforceable against
Guarantor in accordance with its terms, except as
limited by bankruptcy, insolvency, or other laws of
general application relating to the enforcement of
creditor's rights.
(b) The execution, delivery, and performance by Guarantor of
this Agreement does not and will not violate any law or
any order of any court, governmental authority or
arbitrator and do not and will not conflict with, result
in a breach of, or constitute a default under, or result
in the imposition of any lien upon any assets of
Guarantor pursuant to the provisions of any indenture,
mortgage, deed of trust, security agreement, franchise,
permit, license, or other instrument or agreement to
which Guarantor or its property is bound.
(c) No authorization, approval, or consent of, and no filing
or registration with, any court, governmental authority,
or third party is necessary for the execution, delivery,
or performance by Guarantor of this Agreement or the
validity or enforceability thereof.
(d) The value of the consideration received and to be
received by Guarantor as a result of Borrower and
Company entering into the loan transaction and Guarantor
executing and delivering this Agreement is reasonably
worth at least as much as the liability and obligation
of Guarantor hereunder, and such liability and
obligation has benefited or may reasonably be expected
to benefit Guarantor directly or indirectly.
7. Guarantor covenants and agrees that, as long as the Guaranteed
Indebtedness or any part thereof is outstanding or Company has any commitment to
Borrower:
(a) Guarantor will furnish promptly to Company written
notice of the occurrence of any default under this
Agreement of which Guarantor have knowledge.
(b) Guarantor will furnish promptly to Company such
information, including financial statements, concerning
Guarantor as Company may request.
If for any reason whatsoever (including but not limited to ultra xxxxx,
lack of authority, illegality, force majeure, act of God or impossibility) the
Guaranteed Indebtedness or the Obligations cannot be enforced against Borrower,
such unenforceability shall in no manner affect the liability of Guarantor
hereunder and Guarantor shall be liable hereunder notwithstanding that Borrower
may not be liable for such Indebtedness or such Obligations and to the same
extent as Guarantor would have been liable if such Indebtedness or Obligations
had been enforceable against Borrower.
In the event any payment by Borrower to Company is held to constitute a
preference under any applicable Bankruptcy Law, or if for any other reason
Company is required to refund such payment or pay the amount thereof to any
other party, such payment by Borrower to Company shall not constitute a release
of Guarantor from any liability hereunder, but Guarantor agrees to pay such
amount to Company upon demand and this Guaranty shall continue to be effective
or shall be reinstated, as the case may be, to the extent of any such payment or
payments.
8. Company shall have the right to setoff and apply against this Agreement
or the Guaranteed Indebtedness or both, without notice to Guarantor, any and all
deposits (general or special, time or demand, provisional or final) or other
sums at any time credited by or owing from Company to Guarantor whether or not
the Guaranteed Indebtedness is then due and irrespective of whether or not
Company shall have made any demand under this Agreement. As security for this
Agreement and the Guaranteed Indebtedness, Guarantor hereby grants Company a
security interest in all money, instruments and other property of Guarantor now
or hereafter held by Company, including without limitation, property held in
safekeeping. In addition to Company's right of setoff and as further security
for this Agreement and Guaranteed Indebtedness, Guarantor hereby grants Company
a security interest in all deposits (general or special, time or demand,
provisional or final) and all other accounts of Guarantor now or hereafter on
deposit with or held by Company and all other sums at any time credited by or
owing from Company to Guarantor. The rights and remedies of Company hereunder
are in addition to other rights and remedies (including without limitation,
other rights of setoff) which Company may have.
9. All present and future indebtedness of Borrower to Guarantor is hereby
subordinated to the Guaranteed Indebtedness and is hereby assigned to Company as
security for the Guaranteed Indebtedness. If any sums shall be paid to Guarantor
on account of such indebtedness, such sums if there is an existing default under
this Agreement or any other instrument comprising the loan transaction shall be
held in trust by Guarantor for the benefit of Company and shall forthwith be
paid to Company without affecting the liability of Guarantor under this
Agreement. Upon the request of Company, Guarantor shall execute, deliver, and
endorse to Company such documents and instruments as Company deems necessary or
appropriate to perfect, preserve, and enforce its rights hereunder.
10. No amendment or waiver of any provision of this Agreement or consent
to any departure by the Guarantor therefrom shall in any event be effective
unless the same shall be in writing and signed by Company. No failure on the
part of Company to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
11. Any acknowledgment or new promise, whether by payment of principal or
interest or otherwise and whether by Borrower or others (including Guarantor),
with respect to any of the Guaranteed Indebtedness shall, if the statute of
limitations in favor of Guarantor against Company shall have commenced to run,
toll the running of such statute of limitations and, if the period of such
statute of limitations shall have expired, prevent the operation of such statute
of limitations.
12. This Agreement is for the benefit of Company and its successors and
assigns, and in the event of an assignment of the Guaranteed Indebtedness, or
any part thereof, the rights and benefits hereunder, to the extent applicable to
the indebtedness so assigned, may be transferred with such indebtedness. This
Agreement is binding not only on Guarantor, but on Guarantor's successors and
assigns.
13. Guarantor recognizes that Company is relying upon this Agreement and
the undertaking of Guarantor hereunder in making a loan to Borrower and further
recognizes that the execution and delivery of this Agreement is a material
inducement to Company in entering into the loan transaction.
14. THIS AGREEMENT IS EXECUTED AND DELIVERED AS AN INCIDENT TO A LENDING
TRANSACTION NEGOTIATED, CONSUMMATED, AND PERFORMABLE IN NEVADA, AND SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA.
15. Guarantor shall pay on demand all attorneys' fees and all other costs
and expenses incurred by Company in connection with the preparation,
administration, enforcement, or collection of this Agreement.
16. Guarantor hereby waives promptness, diligence, demand of payment,
notice of acceptance of this Agreement, presentment, notice of protest, notice
of dishonor, notice of the incurring by Borrower of additional indebtedness,
notice of intent to accelerate, notice of acceleration and all other notices and
demands with respect to the Guaranteed Indebtedness and this Agreement.
Guarantor waives all defenses given to sureties or guarantors at law or in
equity other than the actual payment of the Indebtedness and performance of the
Obligations and all defenses based upon questions as to the validity, legality
or enforceability of the Indebtedness or the Obligations and agrees that
Guarantor shall be primarily liable hereunder.
17. Guarantor agrees that Company may exercise any and all rights granted
to it under any other instrument comprising the loan transaction without
affecting the validity or enforceability of this Agreement.
18. Where two or more persons or entities have executed this Guaranty,
unless the context clearly indicates otherwise, all references in this Guaranty
to "Guarantor" shall mean all of the guarantors hereunder and the obligations
and liability of such guarantors hereunder shall be joint and several. Suit may
be brought against the guarantors, jointly and severally, or against any one or
more of them, without impairing the rights of Company against the other or
others of the guarantors, if any. Further, Company may compromise Company's
right to collect the entire Indebtedness from one or more of the guarantors by
accepting lesser sums as Company may see fit and releasing one or more of such
guarantors from further liability to Company without impairing the right of
Company to demand and collect the balance of the Guaranteed Indebtedness from
the other guarantors not so released.
19. THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
20. It is the intention of the parties hereto to comply with applicable
usury laws; accordingly, it is agreed that notwithstanding any provisions to the
contrary in this Guaranty, or in any of the documents securing payment hereof or
otherwise relating hereto, in no event shall this Agreement or such documents
require the payment or permit the collection of interest in excess of the
maximum amount permitted by such laws. If any such excess of interest is
contracted for, charged or received, under this Agreement or under any of the
instruments securing payment hereof or otherwise relating hereto, or in the
event the maturity of the indebtedness evidenced by this Agreement is
accelerated in whole or in part, or in the event that all or part of the
principal or interest of this Agreement shall be prepaid, so that under any of
such circumstances the amount of interest contracted for, charged or received
under this Agreement or under any of the instruments securing payment hereof or
otherwise relating hereto, on the amount of principal actually outstanding from
time to time under this Agreement, shall exceed the maximum amount of interest
permitted by applicable usury laws, then in any such event (a) the provisions of
this paragraph shall govern and control, (b) neither the Guarantor of this
Agreement nor any other person or entity now or hereafter liable for the payment
thereof shall be obligated to pay the amount of such interest to the extent that
it is in excess of the maximum amount of interest permitted by applicable
usury laws, (c) any such excess which may have been collected shall be either
applied as a credit against the then unpaid principal amount thereof or refunded
to Guarantor, at Company's option, and (d) the effective rate of interest shall
be automatically reduced to the maximum lawful contract rate allowed under
applicable usury laws as now or hereafter construed by the courts having
jurisdiction thereof. It is further agreed that without limitation of the
foregoing, all calculations of the rate of interest contracted for, charged or
received under this Agreement or under such other documents which are made for
the purposes of determining whether such rate exceeds the maximum lawful
contract rate, shall be made, to the extent permitted by applicable laws, by
amortizing, prorating, allocating and spreading in equal parts during the period
of the full stated term of the loan evidenced hereby, all interest at any time
contracted for, charged or received from Guarantor or otherwise by Guarantor in
connection with such loan.
EXECUTED as of the Effective Date set forth first above.
"Guarantor"
----------------------------
XXXXXX X. XXXXXX
