GUARANTY
This GUARANTY AGREEMENT
(“ Agreement ”), dated as of August 8, 2008 is
made by each of the undersigned (each a " Guarantor ", and
collectively, the " Guarantors "), in favor of Brencourt
Advisors, LLC as agent (the “ Secured Party ”)
for the holders of the Convertible Debentures referred to in the
following paragraph (the “ Holders
”).
WHEREAS, in connection with the Securities Purchase
Agreement by and among IR BIOSCIENCES HOLDINGS, INC.,
a Delaware corporation (the " Company ") and the
Secured Party of even date herewith (the “
Securities Purchase Agreement ”), the Company has
agreed, upon the terms and subject to the conditions of the
Securities Purchase Agreement, to issue to the Holders (i) an
aggregate original principal amount of up to $5,000,000 of senior
secured convertible debentures (the “ Convertible
Debentures ”), which shall be convertible into shares of
the Company’s Common Stock (the “ Conversion
Shares ”); and (ii) warrants (the “ Warrants
”) to be exercisable to acquire additional shares of Common
Stock (the “ Warrants Shares ”) initially in
that number of shares of Common Stock set forth in the Securities
Purchase Agreement;
WHEREAS , each of the Guarantors is executing and
delivering a Security Agreement dated the date hereof (the “
Security Agreement ”) granting a lien in all of the
Pledged Property (as defined in the Security Agreement) to the
Secured Party;
WHEREAS, it is a condition precedent to each Holder
purchasing the Convertible Debentures and Warrants pursuant to the
Securities Purchase Agreement that the Guarantors shall have
executed and delivered to the Secured Party this Agreement
guaranteeing all of the obligations of the Company under the
Transaction Documents (as defined in the Securities Purchase
Agreement, the “ Transaction Documents
”;
WHEREAS , each Guarantor has determined that the
execution, delivery and performance of this Guaranty directly
benefits, and is in the best interest of, such
Guarantor;
NOW, THEREFORE
, in consideration of the premises
and the agreements herein and in order to induce the Secured Party
to perform under the Securities Purchase Agreement, each Guarantor
hereby agrees with the Secured Party as follows:
SECTION 1.
Definitions . Reference is hereby made to the
Securities Purchase Agreement and the Convertible Debentures issued
pursuant thereto for a statement of the terms
thereof. All terms used in this Guaranty, which are
defined in the Securities Purchase Agreement or the Convertible
Debentures and not otherwise defined herein, shall have the same
meanings herein as set forth therein.
SECTION 2. Guaranty
. The Guarantors, jointly and severally, hereby
unconditionally and irrevocably, guaranty the punctual payment, as
and when due and payable, by stated maturity or otherwise, of all
Obligations (as defined in the Security Agreement) of the Company
from time to time owing by it to the Secured Party (such
obligations, to the extent not paid by the Company, being the "
Guaranteed Obligations "), and agrees to pay any and all
expenses (including reasonable counsel fees and expenses)
reasonably incurred by the Secured Party in enforcing any rights
under this Guaranty. Without limiting the generality of
the foregoing, each Guarantor's liability hereunder shall extend to
all amounts that constitute part of the Guaranteed Obligations and
would be owed by the Company to the Secured Party but for the fact
that they are unenforceable or not allowable due to the existence
of an insolvency proceeding involving any Guarantor or the Company
(each, a " Transaction Party ").
SECTION 3. Guaranty
Absolute; Continuing Guaranty; Assignments .
(a) The Guarantors,
jointly and severally, guaranty that the Guaranteed Obligations
will be paid strictly in accordance with the terms of the
Transaction Documents, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of
such terms or the rights of the Secured Party with respect
thereto. The obligations of each Guarantor under this
Guaranty are independent of the Guaranteed Obligations, and a
separate action or actions may be brought and prosecuted against
any Guarantor to enforce such obligations, irrespective of whether
any action is brought against any Transaction Party or whether any
Transaction Party is joined in any such action or
actions. The liability of any Guarantor under this
Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and each Guarantor hereby irrevocably waives, to
the extent permitted by law, any defenses it may now or hereafter
have in any way relating to, any or all of the
following:
(i) any lack of
validity or enforceability of any Transaction Document or any
agreement or instrument relating thereto;
(ii) any change in the
time, manner or place of payment of, or in any other term of, all
or any of the Guaranteed Obligations, or any other amendment or
waiver of or any consent to departure from any Transaction
Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional
credit to any Transaction Party or otherwise;
(iii) any taking,
exchange, release or non-perfection of any Pledged Property (as
defined in the Security Documents), or any taking, release or
amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Guaranteed Obligations;
(iv) any change,
restructuring or termination of the corporate, limited liability
company or partnership structure or existence of any Transaction
Party; or
(v) any other
circumstance (including any statute of limitations) or any
existence of or reliance on any representation by the Secured Party
that might otherwise constitute a defense available to, or a
discharge of, any Transaction Party or any other guarantor or
surety.
This Guaranty shall continue to be effective or
be reinstated, as the case may be, if at any time any payment of
any of the Guaranteed Obligations is rescinded or must otherwise be
returned by the Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of any Transaction Party
or otherwise, all as though such payment had not been
made.
(b) This Guaranty is a
continuing guaranty and shall (i) remain in full force and effect
until the indefeasible cash payment in full of the Guaranteed
Obligations (other than inchoate indemnity obligations) and (ii) be
binding upon each Guarantor and its respective successors and
assigns. This Guaranty shall inure to the benefit of and
be enforceable by the Secured Party and its successors, and
permitted pledgees, transferees and assigns. Without
limiting the generality of the foregoing sentence, the Secured
Party may pledge, assign or otherwise transfer all or any portion
of its rights and obligations under and subject to the terms of any
Transaction Document to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect
thereof granted to the Secured Party herein or otherwise, in each
case as provided in the Securities Purchase Agreement or such
Transaction Document.
SECTION 4. Waivers
. To the extent permitted by applicable law, each
Guarantor hereby waives promptness, diligence, notice of acceptance
and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that the Secured
Party exhaust any right or take any action against any Transaction
Party or any other Person or any Pledged Property. The
Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated herein and
that the waiver set forth in this Section 4 is knowingly made in
contemplation of such benefits. The Guarantors hereby
waive any right to revoke this Guaranty, and acknowledges that this
Guaranty is continuing in nature and applies to all Guaranteed
Obligations, whether existing now or in the future.
SECTION 5.
Subrogation . No Guarantor may exercise any
rights that it may now or hereafter acquire against any Transaction
Party or any other guarantor that arise from the existence,
payment, performance or enforcement of any Guarantor's obligations
under this Guaranty, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy
of the Secured Party against any Transaction Party or
any other guarantor or any Pledged Property, whether or not such
claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or
receive from any Transactio
