This GUARANTY
(this “ Guaranty ”), dated as of
October 17, 2008, is made by Liberator Medical Supply, Inc., a
Florida corporation (the “ Guarantor ”), in
favor of the “ Noteholders ” (as defined
below).
WHEREAS, Liberator
Medical Holdings, Inc., a Nevada corporation and the holder of all
of the issued and outstanding capital stock of the Guarantor (the
“ Company ”), as issuer, the Guarantor and
Liberator Health and Education Services, Inc., as guarantors, and
each party listed as a “Buyer” (each a “
Buyer ”, and collectively, the “ Buyers
” and together with their successors and assigns and each
other holder of a Note, each a “ Noteholder ”
and collectively the “ Noteholders ”) on the
signature pages attached to the Securities Purchase Agreement,
dated as of October 17, 2008 (as amended, restated or
otherwise modified from time to time, the “ Securities
Purchase Agreement ”), are parties to the Securities
Purchase Agreement;
WHEREAS, the
Securities Purchase Agreement requires, among other things, that
the Guarantor execute and deliver to the Buyers a guaranty
guaranteeing all of the obligations of the Company under the Notes
(as defined below); and
WHEREAS, the
Guarantor has determined that the execution, delivery and
performance of this Guaranty benefits, and is in the best interest
of, the Guarantor.
NOW, THEREFORE, in
consideration of the premises and the agreements herein and in
order to induce the Buyers to perform their obligations under the
Securities Purchase Agreement to, among other things, purchase the
Notes and Warrants (as defined in the Securities Purchase
Agreement) from the Company, the Guarantor hereby agrees for the
benefit of the Noteholders as follows:
SECTION 1.
Definitions . Reference is hereby made to the
“Notes” (as defined in and issued pursuant to the
Securities Purchase Agreement, and as such Notes may be amended,
restated, replaced or otherwise modified from time to time in
accordance with the terms thereof, collectively, the “
Notes ”). All capitalized terms used in this Guaranty,
which are defined in the Notes and not otherwise defined herein,
shall have the same meanings herein as set forth
therein.
SECTION 2.
Guaranty . The Guarantor hereby unconditionally and
irrevocably, guaranties the punctual payment, as and when due and
payable, by stated maturity or otherwise, of all obligations of the
Company from time to time owing by it in respect of the Notes,
including, without limitation, all interest that accrues after the
commencement of any insolvency proceeding of the Company or the
Guarantor, whether or not the payment of such interest is
unenforceable or is not allowable due to the existence of such
insolvency proceeding, and all fees, commissions, expense
reimbursements, indemnifications and all other amounts due or to
become due under the Notes (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 Noteholders in enforcing this Guaranty. Without
limiting the generality of the foregoing, the 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 Noteholders but for the fact that they are unenforceable or
not allowable due to the existence of an insolvency proceeding
involving the Guarantor or the Company (each, a “
Transaction Party ”).
SECTION 3.
Guaranty Absolute; Continuing Guaranty; Assignments; Limitation
of Guaranty .
(a) The
Guarantor guaranties that the Guaranteed Obligations will be paid
strictly in accordance with the terms of the Notes, 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
Noteholders with respect thereto. The obligations of the Guarantor
under this Guaranty are independent of the Guaranteed Obligations,
and a separate action or actions may be brought and prosecuted
against the 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 the Guarantor under this Guaranty shall
be irrevocable, absolute and unconditional irrespective of, and the
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 the Notes or any other
Transaction Document (as defined in the Securities Purchase
Agreement) or 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 the Notes,
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 collateral
securing the Guaranteed Obligations, if any, 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 any Buyer or
Noteholder 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 a Noteholder 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.
-2-
(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/or the conversion of all of the Notes into shares of Common
Stock (or such other securities or consideration the Notes are then
convertible into or exchangeable for in accordance with the terms
of the Notes and payment of all other amounts payable under this
Guaranty (other than inchoate indemnity obligations) (the “
Guaranty Satisfaction Conditions ”) and shall not
terminate for any reason prior to the Maturity Date of the Notes
(other than satisfaction in full of the Guaranty Satisfaction
Conditions) and (ii) be binding upon the Guarantor and its
successors and assigns. This Guaranty shall inure to the benefit of
and be enforceable by each Noteholder and its successors and
permitted pledgees, transferees and assigns. Notwithstanding the
foregoing and for the avoidance of doubt, this Guaranty will expire
and the Guarantor will be released from its obligations hereunder
upon the earlier of the satisfaction in full of the Guaranty
Satisfaction Conditions
(c) Any term
or provision of this Guaranty or any Transaction Document to the
contrary notwithstanding, the maximum aggregate amount for which
the Guarantor shall be liable hereunder shall not exceed the
maximum amount for the Guarantor can be liable without rendering
this Guaranty or any other Transaction Document, as it relates to
the Guarantor, subject to avoidance under applicable requirements
of law relating to fraudulent conveyance or fraudulent transfer
(including the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act and Section 548 of Title 11 of the
United States Code or any applicable provisions of comparable laws
relating to bankruptcy, insolvency or the protection of
creditors).
SECTION 4.
Waivers . To the extent permitted by applicable law, the
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
Noteholders exhaust any right or take any action against any
Transaction Party or any other Person or any collateral, if any,
securing the Guaranteed Obligations. The Guarantor acknowledges
that it will receive direct and indirect benefits from the
financing arrangements contemplated by the Securities Purchase
Agreement and the Notes and that the waiver set forth in this
Section 4 is knowing
|
