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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:
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(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
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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 defined in the Operating Agreement of the CDE ), as may be
payable by Borrower to the CDE or the Fund pursuant to such
Operating Agreement (the " Guaranteed Loan
Obligations ", together with the Guaranteed Indemnity
Obligations, the " Guaranteed Obligations "), and
Biovest agrees to pay all reasonable costs, expenses, and
attorneys’ fees paid or incurred by USB and the CDE in
enforcing this Guaranty.
3. This Guaranty is an absolute, unconditional, and continuing
guaranty of payment and performance of the Guaranteed Obligations
and shall continue to be in force and be binding upon each
Guarantor until all of the Guaranteed Obligations are irrevocably
and indefeasibly satisfied or paid in full. This Guaranty is an
agreement of payment and performance and not merely of
collection.
4. Each Guarantor waives any and all defenses, claims, setoffs,
and discharges of Borrower, or any other obligor, pertaining to the
Guaranteed Indemnity Obligations or the Guaranteed Loan
Obligations, as applicable, except the defense of discharge by
payment in full. Without limiting the generality of the foregoing,
each Guarantor will not assert, plead, or enforce against USB, the
CDE or SLD any defense available to Borrower of waiver, release,
discharge, or disallowance in bankruptcy, statute of limitations,
res judicata, statute of frauds, anti-deficiency statute,
fraud, incapacity, minority, usury, illegality or unenforceability
which may be available to Borrower or any other person liable in
respect of any of the Guaranteed Obligation
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