EXHIBIT 10.11
EXECUTION COPY
GUARANTY
THIS GUARANTY
(this “ Guaranty
”) is made as of the 8th day of December, 2006 by and among
HOPKINS CAPITAL GROUP II, LLC (“ Hopkins
”), FRANCIS E. O’DONNELL, JR. (“
O’Donnell ”), KATHLEEN M.
O’DONNELL, TRUSTEE OF THE FRANCIS E. O’DONNELL, JR.
IRREVOCABLE TRUST (the “ O’Donnell
Trust ”), DENNIS L. RYLL (“
Ryll ”), RONALD E. OSMAN (“
Osman ”), ALAN M. PEARCE (“
Pearce ”), STEVEN ARIKIAN (“
Arikian ”), STEVEN J. STOGEL (“
Stogel ”), DONALD L. FERGUSON (“
Ferguson ”) and DONALD L. FERGUSON, TRUSTEE
OF THE DONALD L. FERGUSON REVOCABLE TRUST (the “
Ferguson Trust ”) (O’Donnell, the
O’Donnell Trust, Ryll, Osman, Pearce, Arikian, Stogel,
Ferguson and the Ferguson Trust, whether one or more, hereinafter
called “ Individual Guarantor ” in the
singular), BIOVEST INTERNATIONAL, INC., a Delaware
corporation (“ Biovest ”) (Biovest and
the Individual Guarantors, whether one or more, hereinafter called
“ Guarantor ” in the singular) to and for
the benefit of U.S. BANCORP COMMUNITY INVESTMENT
CORPORATION, a Delaware corporation (“ USB
”), and with respect to the guaranty set forth in
Section 2B hereof, ST. LOUIS NEW MARKETS TAX CREDIT
FUND-II, LLC, a Missouri limited liability company (the “
CDE ”), and its managing member, ST. LOUIS
DEVELOPMENT CORPORATION , a Missouri nonprofit corporation
(“ SLD ”).
RECITALS
WHEREAS, the CDE has received a
sub-allocation of New Markets Tax Credits (the “ Tax
Credits ”) under Section 45D of the Internal
Revenue Code of 1986, as amended, and the rules an regulations
promulgated thereunder (collectively, the “
Code ”).
WHEREAS, AutovaxID Investment LLC, a
Missouri limited liability company (the “ Fund
”) has contributed equity to the CDE (the “ QEI
Contribution ” ), which equity is expected to
constitute a “qualified equity investment” ( “
QEI ”) under the New Markets Tax Credit program
authorized by Section 45D of the Code (the “ NMTC
Program ”).
WHEREAS, the QEI Contribution is
being funded in part with the proceeds of equity contributed to the
Fund by USB. The proceeds of the QEI Contribution will be used by
the CDE to fund a loan to AutovaxID, Inc., a Florida corporation
(“ Borrower ”), in the original principal
amount of $7,700,000 (the “ CDE Loan ”),
which is expected to constitute a “qualified low-income
community investment” under the NMTC Program.
WHEREAS, the Tax Credits claimable
by USB in connection with the QEI Contribution have allowed USB to
provide the QEI Contribution to the CDE on more favorable terms,
which in turn has allowed the CDE to provide the CDE Loan to
Borrower on more favorable terms and, as a result, Borrower
believes that it shall substantially benefit, directly or
indirectly, from the making of the QEI Contribution.
WHEREAS, the Borrower is primarily
engaged in the business of manufacturing automated cell production
instruments within a United States population census tract number
which constitutes a Low-Income Community under the NMTC Program,
and the proceeds of the CDE Loan will be used to finance certain
activities of Borrower associated with the foregoing
activities.
WHEREAS, in connection with the
foregoing and concurrently herewith, USB and Borrower have entered
into that certain Tax Credit Reimbursement and Indemnity Agreement
(the “ Indemnity ”).
WHEREAS, each Guarantor is an owner
(directly or indirectly) of Borrower, USB’s acquisition of a
membership interest in the Fund is of material benefit to each
Guarantor, and without this Guaranty, USB would not acquire a
membership interest in, or make its contribution to, the
Fund.
WHEREAS, to induce USB to acquire a
membership interest in, and make its equity contribution to, the
Fund, each Guarantor has agreed to enter into this
Guaranty.
NOW, THEREFORE, in consideration of
the foregoing, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, each hereby
covenants and agrees to and for the benefit of USB as
follows:
1. Notwithstanding anything to the
contrary set forth herein, as used herein, the terms “
several ”, “ severally ”, “
joint and several ” or “ jointly and
severally ” as they relate to the Guaranteed Indemnity
Obligations hereunder mean:
(A) The obligation of Hopkins,
O’Donnell and the O’Donnell Trust, collectively, as to
any liability covered hereby shall be several and not joint and
several with the liability of O’Donnell and the
O’Donnell Trust, collectively, not to exceed 25.84 %
of any such liability for a maximum aggregate liability of
$1,150,000, and as limited hereby may be enforced at the option of
USB against each Guarantor of Guaranteed Indemnity Obligations
severally;
(B) The obligation of Ryll as to any
liability covered hereby shall be several and not joint and several
with the liability of Ryll not to exceed 22.47 % of any such
liability for a maximum aggregate liability of $1,000,000, and as
limited hereby may be enforced at the option of USB against each
Guarantor of Guaranteed Indemnity Obligations severally;
(C) The obligation of Osman as to
any liability covered hereby shall be several and not joint and
several with the liability of Osman not to exceed 22.47 % of
any such liability for a maximum aggregate liability of $1,000,000,
and as limited hereby may be enforced at the option of USB against
each Guarantor of Guaranteed Indemnity Obligations
severally;
(D) The obligation of Pearce as to
any liability covered hereby shall be several and not joint and
several with the liability of Pearce not to exceed 11.24 %
of any such liability for a maximum aggregate liability of
$500,000, and as limited hereby may be enforced at the option of
USB against each Guarantor of Guaranteed Indemnity Obligations
severally;
(E) The obligation of Arikian as to
any liability covered hereby shall be several and not joint and
several with the liability of Arikian not to exceed 1.12 %
of any such liability for a maximum aggregate liability of $50,000,
and as limited hereby may be enforced at the option of USB against
each Guarantor of Guaranteed Indemnity Obligations
severally;
(F) The obligation of Stogel as to
any liability covered hereby shall be several and not joint and
several with the liability of Pearce not to exceed 5.62 % of
any such liability for a maximum aggregate liability of $250,000,
and as limited hereby may be enforced at the option of USB against
each Guarantor of Guaranteed Indemnity Obligations
severally;
(G) The obligation of Ferguson and
the Ferguson Trust, collectively, as to any liability covered
hereby shall be several and not joint and several with the
liability of Ferguson and the Ferguson Trust, collectively. not to
exceed 11.24 % of any such liability
2
for a maximum aggregate liability of
$500,000, and as limited hereby may be enforced at the option of
USB against each Guarantor of Guaranteed Indemnity Obligations
severally;
(H) Biovest shall be jointly and
severally liable for all of the Guaranteed Obligations
hereunder.
2. A. Each Individual Guarantor
severally (as more particularly defined and limited in maximum and
percentage liability in Section 1 hereof) and Biovest jointly
and severally absolutely, unconditionally, and irrevocably
guarantees the full and prompt payment of any and all amounts which
may become payable by Borrower under the Indemnity (the “
Guaranteed Indemnity Obligations ”);
provided , however , that for purpose of determining
the Guaranteed Indemnity Obligations guaranteed by the Individual
Guarantors, and for such purpose only, the Minimum Return Shortfall
shall be determined: (i) as if the internal rate of return
anticipated by the Investor, as reflected in the Financial
Forecast, was an internal rate of return calculated without
inclusion of any deductions of the Fund attributable to interest
accruals in excess of payments, and (ii) without reference to
any actual deductions taken by the Fund attributable to interest
accruals in excess of payments. The terms “ Minimum
Return Shortfall ,” “ Investor
” and “ Financial Forecast ” shall
all have the meaning set forth in the Indemnity. Each Individual
Guarantor severally (as more particularly defined and limited in
maximum liability in Section 1 hereof) and absolutely,
unconditionally, and irrevocably hereby also agrees to pay all
reasonable costs, expenses, damages and attorneys’ fees paid
or incurred by USB, the CDE and SLD in endeavoring to collect the
Guaranteed Indemnity Obligations or in enforcing this Guaranty
against such Individual Guarantor; provided , however
, in no event shall any Individual Guarantor be required to pay any
amounts required pursuant to the foregoing provisions of this
sentence in excess of such Individual Guarantor’s maximum
aggregate liability listed in Section 1 hereof. Biovest
jointly and severally absolutely, unconditionally, and irrevocably
hereby also agrees to pay all reasonable costs, expenses, damages
and attorneys’ fees paid or incurred by USB, the CDE and SLD
in endeavoring to collect the Guaranteed Indemnity Obligations or
the Guaranteed Loan Obligations or in enforcing this
Guaranty.
B. Biovest absolutely,
unconditionally, and irrevocably guarantees the full and prompt
payment of any and all obligations of Borrower on the CDE Loan,
together with any Expenses (as such term is def
