GUARANTY
GUARANTY
GUARANTY,
effective
as of November 29, 2006, by Bio Solutions Production, Inc., a Nevada corporation
(“BSP”) and Bio Extraction Services, Inc., a New York corporation (“BESI”, and
together with BSP, collectively, the “Guarantors”), in favor of each of the
parties set forth on the signature page hereto (each, an “Investor” and
collectively, the “Investors”).
WHEREAS,
pursuant to the Loan Agreement dated the date hereof between Bio Solutions
Manufacturing, Inc., a New York corporation (“BSLM” or the “Company”) and the
Investors, (i) the Investors have agreed to amend and restate certain
obligations relating to advances previously made by the Investors on behalf
of
BSLM (the “Amended Notes”) and (ii) the Investors have agreed from time to time
to loan to BSLM certain principal amounts (collectively, the “Loans”), which
shall be evidenced by a secured convertible promissory note (the “Note”,
together with the Amended Notes, the “Notes”). The principal amount outstanding
and interest payable under the Notes is convertible into shares of BSLM’s common
stock, $0.001 par value (the “Common Stock”). In connection with the
transactions contemplated by the Loan Agreement, BSLM and the Investors have
entered into the Loan Agreement, dated the date hereof (the “Loan Agreement”);
and
WHEREAS,
the Guarantors expect to receive substantial direct and indirect benefits from
the extensions of credit to the Company by the Investors pursuant to the Loan
Agreement and the other Transaction Documents (which benefits are hereby
acknowledged);
WHEREAS,
the Company and the Guarantors are members of a group of related corporations,
the success of any one of which is dependent, in part, on the success of the
other members of such group;
WHEREAS,
it is a condition precedent to the Investors’ making any additional loans or
otherwise extending credit to the Company under the Loan Agreement that the
Guarantors execute and deliver to the Investors a guaranty substantially in
the
form hereof; and
WHEREAS,
the Guarantors wish to guaranty the Company’s obligations to the Investors under
or in respect of the Obligations, as provided herein;
1
NOW,
THEREFORE, in consideration of the agreements herein contained and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Guarantors hereby agree with the Investors as follows:
1.
Definitions.
The
terms “Transaction Documents” and all other capitalized terms used herein
without definition shall have the respective meanings provided therefor in
the
Loan Agreement.
2.
Guaranty
of Payment and Performance.
The
Guarantors hereby jointly and severally guarantee to the Investors the full
and
punctual payment when due (whether at stated maturity, by required pre-payment,
by acceleration or otherwise), as well as the performance, of all of the
obligations under the Notes, the Loan Agreement, and the Transaction Documents
(collectively, the “Obligations”), including all such which would become due but
for the operation of the automatic stay pursuant to §362(a) of the Federal
Bankruptcy Code and the operation of §§502(b) and 506(b) of the Federal
Bankruptcy Code. This Guaranty is an absolute, unconditional, and continuing
guaranty of the full and punctual payment and performance of all of the
Obligations and not of their collectibility only and is in no way conditioned
upon any requirement that any Investor first attempt to collect any of the
Obligations from the Company or resort to any collateral security or other
means
of obtaining payment. Should the Company default in the payment or performance
of any of the Obligations, the obligations of the Guarantors hereunder with
respect to such Obligations in default shall, upon demand by the Investors,
become immediately due and payable to the Investors, without demand or notice
of
any nature, all of which are expressly waived by the Guarantors. Payments by
the
Guarantors hereunder may be required by the Investors on any number of
occasions. All payments by the Guarantors hereunder shall be made to the
Investors, in the manner and at the place of payment specified therefor in
the
Loan Agreement, for the account of the Investors.
3.
Guarantors’
Agreement to Pay Enforcement Costs, etc.
The
Guarantors further agree, as the principal obligors and not as a guarantor
only,
to pay to the Investors, on demand, all costs and expenses (including court
costs and legal expenses) incurred or expended by any Investor in connection
with the Obligations, this Guaranty and the enforcement thereof, together with
interest on amounts recoverable under this Section 3 from the time when such
amounts become due until payment, whether before or after judgment, at the
rate
of interest for overdue principal set forth in the Transaction Documents,
provided that if such interest exceeds the maximum amount permitted to be paid
under applicable law, then such interest shall be reduced to such maximum
permitted amount.
2
4.
Waivers
by Guarantors; Investor’s Freedom to Act.
The
Guarantors agree that the Obligations will be paid and performed strictly in
accordance with their respective terms, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such
terms
or the rights of any Investor with respect thereto. The Guarantors waive
promptness, diligence, presentment, demand, protest, notice of acceptance,
notice of any Obligations incurred and all other notices of any kind, all
defenses which may be available by virtue of any valuation, stay, moratorium
law
or other similar law now or hereafter in effect, any right to require the
marshalling of assets of the Company or any other entity or other person
primarily or secondarily liable with respect to any of the Obligations, and
all
suretyship defenses generally. Without limiting the generality of the foregoing,
the Guarantors agree to the provisions of any instrument evidencing, securing
or
otherwise executed in connection with any Obligation and agrees that the
obligations of the Guarantors hereunder shall not be released or discharged,
in
whole or in part, or otherwise affected by (i) the failure of any Investor
to
assert any claim or demand or to enforce any right or remedy against the Company
or any other entity or other person primarily or secondarily liable with respect
to any of the Obligations; (ii) any extensions, compromise, refinancing,
consolidation or renewals of any Obligation; (iii) any change in the time,
place
or manner of payment of any of the Obligations or any rescissions, waivers,
compromise, refinancing, consolidation or other amendments or modifications
of
any of the terms or provisions of the Transaction Documents or any other
agreement evidencing, securing or otherwise executed in connection with any
of
the Obligations, (iv) the addition, substitution or release of any entity or
other person primarily or secondarily liable for any Obligation; (v) the
adequacy of any rights which any Investor may have against any collateral
security or other means of obtaining repayment of any of the Obligations; (vi)
the impairment of any collateral securing any of the Obligations, including
without limitation the failure to perfect or preserve any rights which any
Investor might have in such collateral security or the substitution, exchange,
surrender, release, loss or destruction of any such collateral security; or
(vii) any other act or omission which might in any manner or to any extent
vary
the risk of either Guarantor or otherwise operate as a release or discharge
of
any such Guarantor, all of which may be done without notice to any such
Guarantor. To the fullest extent permitted by law, each Guarantor hereby
expressly waives any and all rights or defenses arising by reason of (A) any
“one action” or “anti-deficiency” law which would otherwise prevent any Investor
from bringing any action, including any claim for a deficiency, or exercising
any other right or remedy (including any right of set-off), against either
Guarantor before or after such Investor’s commencement or completion of any
foreclosure action, whether judicially, by exercise of power of sale or
otherwise, or (B) any other law which in any other way would otherwise require
any election of remedies by any Investor.
5.
Unenforceability
of Obligations Against Company.
If for
any reason the Company has no legal existence or is under no legal obligation
to
discharge any of the Obligations, or if any of the Obligations have become
irrecoverable from the Company by reason of the Company’s insolvency,
bankruptcy, or reorganization or by other operation of law or for any other
reason, this Guaranty shall nevertheless be binding on each Guarantor to the
same extent as if each Guarantor at all times had been the principal obligor
on
all such Obligations. In the event that acceleration of the time for payment
of
any of the Obligations is stayed upon the insolvency, bankruptcy, or
reorganization of the Company, or for any other reason, all such amounts
otherwise subject to acceleration under the terms of the Transaction Documents
or any other agreement evidencing, securing or otherwise executed in connection
with any Obligation shall be immediately due and payable by the Guarantors.
3
6. Subrogation;
Subordination.
6.1.
Waiver
of Rights Against Company.
Until
the final payment and performance in full of all of the Obligations, the
Guarantors shall not exercise and hereby waive any rights against the Company
arising as a result of payment by the Guarantors hereunder, by way of
subrogation, reimbursement, restitution, contribution or otherwise, and will
not
prove any claim in competition with any Investor in respect of any payment
hereunder in any bankruptcy, insolvency or reorganization case or proceedings
of
any nature; neither Guarantor will claim any setoff, recoupment, or counterclaim
against the Company in respect of any liability of either Guarantor to the
Company; and each Guarantor waives any benefit of and any right to participate
in any collateral security which may be held by any Investor.
6.2.
Subordination.
The
payment of any amounts due with respect to any indebtedness of the Company
for
money borrowed or credit received now or hereafter owed to either Guarantor
is
hereby subordinated to the prior payment in full of all of the Obligations.
Each
Guarantor agrees that, after the occurrence of any default in the payment or
performance of any of the Obligations, neither Guarantor will demand, xxx for
or
otherwise attempt to collect any such indebtedness of the Company to such
Guarantor until all of the Obligations shall have been paid in full. If,
notwithstanding the foregoing sentence, either Guarantor shall collect, enforce
or receive any amounts in respect of such indebtedness while any Obligations
are
still outstanding, such amounts shall be collected, enforced and received by
either Guarantor as trustee for the Investors and be paid over to the Investors,
on account of the Obligations without affecting in any manner the liability
of
either Guarantor under the other provisions of this Guaranty.
6.3.
Provisions
Supplemental.
The
provisions of this Section 6 shall be supplemental to and not in derogation
of
any rights and remedies of the Investors under any separate subordination
agreement which the Investors may at any time and from time to time enter into
with any Guarantor for the benefit of the Investors.
7.
Security;
Setoff.
Each
Guarantor grants to each of the Investors, as security for the full and punctual
payment and performance of all of each Guarantor’s obligations hereunder, a
continuing lien on and security interest in all securities or other property
belonging to such Guarantor now or hereafter held by such Investor and in all
deposits (general or special, time or demand, provisional or final) and other
sums credited by or due from such Investor to such Guarantor or subject to
withdrawal by such Guarantor. Regardless of the adequacy of any collateral
security or other means of obtaining payment of any of the Obligations, each
of
the Investors is hereby authorized at any time and from time to time, without
notice to either Guarantor (any such notice being expressly waived by each
Guarantor) and to the fullest extent permitted by law, to set off and apply
such
deposits and other sums against the obligations of the Guarantors under this
Guaranty, whether or not such Investor shall have made any demand under this
Guaranty and although such obligations may be contingent or unmatured.
4
8.
Further
Assurances.
Each
Guarantor agrees that it will from time to time, at the request of the
Investors, do all such things and execute all such documents as the Investors
may consider necessary or desirable to give full effect to this Guaranty and
to
perfect and preserve the rights and powers of the Investors hereunder. Each
Guarantor acknowledges and confirms that it has established its own adequate
means of obtaining from the Company on a continuing basis all information
desired by such Guarantor concerning the financial condition of the Company
and
that each Guarantor will look to the Company and not to any Investor in order
for such Guarantor to keep adequately informed of changes in the Company’s
financial condition.
9.
Termination;
Reinstatement.
This
Guaranty shall remain in full force and effect until the Investors are given
written notice of the either Guarantor’s intention to discontinue this Guaranty,
notwithstanding any intermediate or temporary payment or settlement of the
whole
or any part of the Obligations. No such notice shall be effective unless
received and acknowledged by an officer of the Investors at the address of
the
Investors for notices set forth in the Loan Agreement. No such notice shall
affect any rights of any Investor hereunder, including without limitation the
rights set forth in Sections 4 and 6, with respect to any Obligations incurred
or accrued prior to the receipt of such notice or any Obligations incurred
or
accrued pursuant to any contract or commitment in existence prior to such
receipt. This Guaranty shall continue to be effective or be reinstated,
notwithstanding any such notice, if at any time any payment made or value
received with respect to any Obligation is rescinded or must otherwise be
returned by any Investor upon the insolvency, bankruptcy, or reorganization
of
the Company, or otherwise, all as though such payment had not been made or
value
received.
10. Successors
and Assigns.
This
Guaranty shall be binding upon each Guarantor, its successors and assigns,
and
shall inure to the benefit of the Investors and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing
sentence, each Investor may assign or otherwise transfer the Transaction
Document to which it is a party or any other agreement or note held by it
evidencing, securing or otherwise executed in connection with the Obligations,
or sell participations in any interest therein, to any other entity or other
person, and such other entity or other person shall thereupon become vested,
to
the extent set forth in the agreement evidencing such assignment, transfer
or
participation, with all the rights in respect thereof granted to such Investor
herein, all in accordance with the terms and conditions set forth in the
Transaction Documents. Neither Guarantor may assign any of its obligations
hereunder.
11.
Amendments
and Waivers.
No
amendment or waiver of any provision of this Guaranty nor consent to any
departure by either Guarantor therefrom shall be effective unless the same shall
be in writing and signed by the Investors. No failure on the part of any
Investor 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.
12.
Notices.
All
notices and other communications called for hereunder shall be made in writing
and, unless otherwise specifically provided herein, shall be deemed to have
been
duly made or given when delivered by hand or mailed first class, postage
prepaid, or, in the case of telegraphic or telexed notice, when transmitted,
answer back received, addressed as follows: if to the Guarantors, at the address
set forth beneath their respective signatures hereto, and if to the Investors,
at the address for notices set forth in the Loan Agreement, or at such address
as either party may designate in writing to the other.
5
13.
Governing
Law; Consent to Jurisdiction.
THIS
GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE
STATE OF NEW YORK. The Guarantors each agree that any suit for the enforcement
of this Guaranty may be brought in the courts of the State of New York or any
federal court sitting therein and consents to the nonexclusive jurisdiction
of
such court and to service of process in any such suit being made upon either
Guarantor by mail at the address specified by reference in Section 12. Each
Guarantor hereby waives any objection that it may now or hereafter have to
the
venue of any such suit or any such court or that such suit was brought in an
inconvenient court.
14.
Waiver
of Jury Trial.
EACH
GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION
OR
CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS GUARANTY, ANY RIGHTS
OR
OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY OF SUCH RIGHTS OR OBLIGATIONS.
Except as prohibited by law, each Guarantor hereby waives any right which each
may have to claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, punitive or consequential damages or any
damages other than, or in addition to, actual damages. Each Guarantor (i)
certifies that no Investor nor any representative, agent or attorney of any
Investor has represented, expressly or otherwise, that any Investor would not,
in the event of litigation, seek to enforce the foregoing waivers and (ii)
acknowledges that, in entering into the Loan Agreement and the other Transaction
Documents to which any Investor is a party, the Investors are relying upon,
among other things, the waivers and certifications contained in this Section
14.
6
15.
Miscellaneous.
This
Guaranty constitutes the entire agreement of the Guarantors with respect to
the
matters set forth herein. The rights and remedies herein provided are cumulative
and not exclusive of any remedies provided by law or any other agreement, and
this Guaranty shall be in addition to any other guaranty of or collateral
security for any of the Obligations. The invalidity or unenforceability of
any
one or more sections of this Guaranty shall not affect the validity or
enforceability of its remaining provisions. Captions are for the ease of
reference only and shall not affect the meaning of the relevant provisions.
The
meanings of all defined terms used in this Guaranty shall be equally applicable
to the singular and plural forms of the terms defined.
16.
Contribution.
To the
extent the Guarantors make a payment hereunder in excess of the aggregate amount
of the benefit received by any such Guarantor in respect of the extensions
of
credit under the Loan Agreement or any Transaction Document (the “Benefit
Amount”), then the Guarantors, after the payment in full, in cash, of all of the
Obligations, shall be entitled to recover from each other guarantor of the
Obligations such excess payment, pro rata, in accordance with the ratio of
the
Benefit Amount received by each such other guarantor to the total Benefit Amount
received by all guarantors of the Obligations, and the right to such recovery
shall be deemed to be an asset and property of the Guarantors so funding;
provided, that all such rights to recovery shall be subordinated and junior
in
right of payment to the final and undefeasible payment in full in cash of all
of
the Obligations.
IN
WITNESS WHEREOF, the Guarantors have caused this Guaranty to be executed and
delivered as of the date first above written.
|
BIO
SOLUTIONS PRODUCTION, INC.
|
|
By:/s/
Xxxxx X. Xxxxxxx
|
| Name: Xxxxx X. Xxxxxxx |
| Title: President |
| BIO EXTRACTION SERVICES, INC. |
| By:/s/ Xxxxx X. Xxxxxxx |
| Name: Xxxxx X. Xxxxxxx |
| Title: President |
