GUARANTY AGREEMENT
THIS
GUARANTY AGREEMENT (this “Guaranty”) is made as
of June 30, 2010 by and between Omniresponse, Inc., a Nevada corporation,
OmniReliant Acquisition Sub, Inc., a Nevada corporation, Designer Liquidator,
Inc., a Nevada corporation,, OmniResponse Cleaning Solutions, Inc., a Florida
corporation, Dual Saw, Inc., a Florida corporation, OmniResponse Safety
Solutions, Inc., a Florida corporation and OmniReliant Corp., a Florida
corporation (each a “Guarantor” and
collectively, the “Guarantors”), and
Vicis Capital Master Fund (“Vicis”), a sub-trust
of Vicis Capital Series Master Trust, a unit trust organized and existing under
the laws of the Cayman Islands.
RECITALS
WHEREAS,
each Guarantor is a wholly owned subsidiary of OmniReliant Holdings, Inc., a
Nevada corporation (“Issuer”).
WHEREAS,
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 “Purchase Agreement”),
Issuer has issued (i) 5,000,000 shares of the Issuer’s Series G Convertible
Preferred Stock, par value $.00001 per share ( the “Preferred Shares”),
to Vicis.
WHEREAS,
it is a condition precedent to Vicis entering into the Purchase Agreement and
acquiring the Preferred Shares that each Guarantor execute and deliver to Vicis
a guaranty in the form hereof.
WHEREAS,
this is the Guaranty Agreement referred to in the Purchase
Agreement.
NOW,
THEREFORE, in consideration of the recitals and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
each Guarantor hereby agrees with Vicis as follows:
ARTICLE
1
DEFINITIONS
When used
in this Guaranty, capitalized terms shall have the meanings specified in the
Purchase Agreement, the preamble, the recitals and as follows:
1.1 Event of
Default. “Event of Default” shall have the meaning specified
in the Purchase Agreement.
1.2 Guaranty. “Guaranty”
shall mean this Guaranty, as the same shall be amended from time to time in
accordance with the terms hereof.
1.3 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.
1.4 Obligations. “Obligations”
shall mean (a) the redemption of, and payment of dividends on, the Preferred
Shares, and any renewal, extension or refinancing thereof; (b) all debts,
liabilities, obligations, covenants and agreements of the Issuer and each
Guarantor contained in the Transaction Documents; and (c) any and all other
debts, liabilities and obligations of each Guarantor and of Issuer to
Vicis.
1.5 Person. “Person”
shall mean and include an individual, partnership, corporation, trust,
unincorporated association and any unit, department or agency of
government.
ARTICLE
2
THE
GUARANTY
2.1 The
Guaranty. Each 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) Each
Guarantor acknowledges that the obligations undertaken herein involve the
guaranty of obligations of a Person other than such Guarantor and, in full
recognition of that fact, such Guarantor consents and agrees that Vicis may, 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 increase or 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 such Guarantor or
the continuing effectiveness hereof, or the enforceability hereof with respect
to all or any part of the Obligations.
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(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. Each Guarantor expressly waives any right to require Vicis
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 each
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. Each 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.
(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, each 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 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 Law which provides that the obligation of a surety or
guarantor must neither be larger in amount nor in other respects more burdensome
than that of the principal or which reduces a surety’s or guarantor’s obligation
in proportion to the principal obligation; (ix) any failure of Vicis to file or
enforce a claim in any bankruptcy or other proceeding with respect to any
Person; (x) 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; (xi) any extension of credit or the grant of any lien under
Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code; (xii) any use of collateral
under Section 363 of the United States Bankruptcy Code; (xiii) any agreement or
stipulation with respect to the provision of adequate protection in any
bankruptcy proceeding of any Person; (xiv) the avoidance of any lien or security
interest in favor of Vicis for any reason; (xv) 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 (xvi) 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, each 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.
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(e) Condition of
Issuer. Each 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. Each Guarantor hereby expressly waives and relinquishes
any duty on the part of Vicis (should any such duty exist) to disclose to such
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.
(f) 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.
(g) Subrogation;
Subordination. Each Guarantor expressly waives any claim for
reimbursement, contribution, indemnity or subrogation which such 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
such 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
and all commitments to lend have been terminated or expired. 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, each
Guarantor hereby agrees that no payment by such Guarantor pursuant to this
Guaranty shall constitute such Guarantor a creditor of Issuer. Until
all amounts owing to Vicis under the Obligations shall have been paid in full,
no Guarantor shall seek any reimbursement from Issuer in respect of payments
made by such Guarantor in connection with this Guaranty, or in respect of
amounts realized by Vicis in connection with any collateral for the Obligations,
and such Guarantor expressly waives 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 waived
pursuant to this Section, shall be enforced nor any payment accepted until the
Obligations are paid in full and all such payments are not subject to any right
of recovery.
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ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF GUARANTOR
Each
Guarantor hereby represents and warrants to Vicis as follows:
3.1 Authorization. Such
Guarantor is a corporation duly and validly organized and existing under the
laws of its state of organization, 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 such Guarantor.
3.2 Enforceability. This
Guaranty is the legal, valid and binding obligation of each Guarantor,
enforceable against such Guarantor in accordance with its terms.
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 any Guarantor; or
any agreement or instrument to which each Guarantor is a party or by which it or
any of its assets is bound.
3.4 Consideration for
Guaranty. Each Guarantor acknowledges and agrees with Vicis
that but for the execution and delivery of this Guaranty by such Guarantor,
Vicis would not have acquired the Preferred Shares. Each Guarantor
acknowledges and agrees that the proceeds of the sale of the Preferred Shares
will result in significant benefit to such Guarantor who is the wholly-owned
subsidiary of Issuer and the intended beneficiary of such proceeds.
ARTICLE
4
COVENANTS
OF THE GUARANTOR
4.1 Actions by
Guarantor. No Guarantor shall take or permit any act, or omit
to take any act, that would: (a) cause Issuer to breach any of the
Obligations; (b) impair the ability of Issuer to perform any of the Obligations;
or (c) cause an Event of Default under the Purchase Agreement.
4.2 Reporting
Requirements. Each Guarantor shall furnish, or cause to be
furnished, to Vicis such information respecting the business, assets and
financial condition of such Guarantor as Vicis may reasonably
request.
ARTICLE
5
MISCELLANEOUS
5.1 Expenses and Attorneys’
Fees. Guarantors shall pay all reasonable fees and expenses
incurred by Vicis, including the reasonable 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 any
Guarantor, both before and after judgment.
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5.2 Revocation. This
is a continuing guaranty and shall remain in full force and effect with respect
to a Guarantor until Vicis receives written notice of revocation signed by such
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. Each 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 each Guarantor, its successors and permitted assigns and shall
inure to the benefit of Vicis, its successors and assigns.
5.4 Survival. 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.
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 Vicis or any Guarantor (to be delivered
care of Issuer) shall be delivered in the manner set forth in Section 12.6 of
the Purchase Agreement.
5.8 Amendment. No
amendment of this Guaranty shall be effective unless in writing and signed by
each Guarantor and Vicis.
5.9 Severability. Any
provision of this Guaranty which 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.
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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, Guarantors shall pay all such taxes, assessments and
charges, including interest and penalties, and each Guarantor hereby indemnifies
Vicis against any liability therefor.
5.11 WAIVER OF RIGHT TO JURY
TRIAL. EACH GUARANTOR ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS GUARANTY WOULD BE BASED UPON DIFFICULT
AND COMPLEX ISSUES AND, THEREFORE, SUCH GUARANTOR AGREES THAT ANY LAWSUIT
ARISING OUT OF ANY SUCH CONTROVERSY SHALL BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
5.12 SUBMISSION TO JURISDICTION;
SERVICE OF PROCESS. AS A MATERIAL INDUCEMENT TO VICIS TO ENTER
INTO THIS TRANSACTION:
EACH
GUARANTOR AGREES THAT ALL ACTIONS OR PROCEEDINGS IN ANY MANNER RELATING TO OR
ARISING OUT OF THIS GUARANTY OR THE OTHER DOCUMENTS EXECUTED IN CONNECTION
HEREWITH MAY BE BROUGHT ONLY IN COURTS OF THE STATE OF NEW YORK OR THE FEDERAL
COURTS LOCATED IN NEW YORK AND SUCH GUARANTOR CONSENTS TO THE JURISDICTION OF
SUCH COURTS. EACH GUARANTOR WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH COURT AND ANY RIGHT IT MAY HAVE NOW OR
HEREAFTER HAVE TO CLAIM THAT ANY SUCH ACTION OR PROCEEDING IS IN AN INCONVENIENT
COURT; AND
each
Guarantor consents to the service of process in any such action or proceeding by
certified mail sent to the address specified in Section 5.7. Nothing contained
herein shall affect the right of Vicis to serve process in any other manner
permitted by law or to commence an action or proceeding in any other
jurisdiction.
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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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OMNIRESPONSE,
INC.
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By:
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Name: Xxxxxx
XxXxxxx
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Title:
Chief Executive Officer/President
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OMNIRELIANT
ACQUISITION SUB, INC.
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By:
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Name: Xxxxxx
XxXxxxx
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Title:
Chief Executive Officer/President
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DESIGNER
LIQUIDATOR, INC.
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By:
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Name: Xxxxxx
XxXxxxx
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Title:
Chief Executive Officer/President
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OMNIRESPONSE
CLEANING SOLUTIONS, INC.
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By:
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Name: Xxxxxx
XxXxxxx
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Title:
Chief Executive Officer/President
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DUAL
SAW, INC.
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By:
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Name: Xxxxxx
XxXxxxx
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Title:
Chief Executive
Officer/President
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Signature
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OMNIRESPONSE
SAFETY SOLUTIONS, INC.
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By:
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Name: Xxxxxx
XxXxxxx
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Title:
Chief Executive Officer/President
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OMNIRELIANT
CORP.
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By:
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Name: Xxxxxx
XxXxxxx
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Title:
Chief Executive
Officer/President
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ACCEPTANCE BY
VICIS
This
Guaranty Agreement is accepted by Vicis Capital Master Fund.
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VICIS
CAPITAL MASTER FUND
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By: Vicis
Capital LLC
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By:
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Name:
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Title:
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Acceptance
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