GUARANTY
1.
Identification .
This
Guaranty (the “Guaranty”), dated as of May ___, 2009,
is entered into by Big Chunk Corp., an Alaska corporation
(“Guarantor”), for the benefit of the Collateral Agent
identified below and the parties identified on Schedule A hereto
(each a “Lender” and collectively, the
“Lenders”).
2.
Recitals .
2.1
Guarantor is a direct subsidiary of Liberty
Star Uranium & Metals Corp., a Nevada corporation
(“Parent”). The Lenders have made and/or are making
loans to Parent (the “Loans”). Guarantor has and will
obtain substantial benefit from the proceeds of the
Loans.
2.2
The Loans are and will be evidenced by certain
promissory Notes issued by Parent at or about the date of this
Guaranty (each a “Note” and collectively
“Notes”) as described on Schedule A hereto pursuant to
subscription agreements dated at or about the date hereof
(“Subscription Agreements”). The Notes are further
identified on Schedule A hereto and were or will be executed by
Parent as “Borrower” or “Debtor” for the
benefit of each Lender as the “Holder” or
“Lender” thereof.
2.3
In consideration of the Loans made, being made, and to
be made by Lenders to Parent and for other good and valuable
consideration, and as security for the performance by Parent of its
obligations under the Notes and as security for the repayment of
the Loans and all other sums due from Parent to Lenders arising
under the Notes (collectively, the “Obligations”),
Guarantor, for good and valuable consideration, receipt of which is
acknowledged, has agreed to enter into this Guaranty.
2.4
The Lenders have appointed Collateral
Agents, LLC as Collateral Agent pursuant to that certain Collateral
Agent Agreement dated as of August 28, 2008 (“Collateral
Agent Agreement”), among the Lenders and Collateral
Agent.
3.
Guaranty .
3.1
Guaranty . Guarantor hereby unconditionally and
irrevocably guarantees, jointly and severally with any other
Guarantor, the punctual payment, performance and observance when
due, whether at stated maturity, by acceleration or otherwise, of
all of the Obligations now or hereafter existing, whether for
principal, interest (including, without limitation, all interest
that accrues after the commencement of any insolvency, bankruptcy
or reorganization of Parent, whether or not constituting an allowed
claim in such proceeding), fees, commissions, expense
reimbursements, liquidated damages, indemnifications or otherwise
(such obligations, to the extent not paid by Parent being the
“Guaranteed Obligations”), and agrees to pay any and
all reasonable costs, fees and expenses (including reasonable
counsel fees and expenses) incurred by Collateral Agent and the
Lenders in enforcing any rights under the guaranty set forth
herein. Without limiting the generality of the foregoing,
Guarantor’s liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by
Parent to Collateral Agent and the Lenders, but for the fact that
they are unenforceable or not allowable due to the existence of an
insolvency, bankruptcy or reorganization involving
Parent.
3.2
Guaranty Absolute . Guarantor guarantees 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 Collateral Agent or the Lenders with
respect thereto. The obligations of Guarantor under this Guaranty
are independent of the Guaranteed Obligations, and a separate
action or actions may be brought and prosecuted against Guarantor
to enforce
1
such
obligations, irrespective of whether any action is brought against
Parent or any other Guarantor or whether Parent or any other
Guarantor is joined in any such action or actions. The liability of
Guarantor under this Guaranty constitutes a primary obligation, and
not a contract of surety, and to the extent permitted by law, shall
be irrevocable, absolute and unconditional irrespective of, and
Guarantor hereby irrevocably waives any defenses it may now or
hereafter have in any way relating to, any or all of the
following:
(a)
any lack of validity of the Notes or any agreement or instrument
relating thereto;
(b)
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 Parent or otherwise;
(c)
any taking, exchange, release, subordination or non-perfection of
any Collateral, 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;
(d)
any change, restructuring or termination of the corporate, limited
liability company or partnership structure or existence of Parent;
or
(e) any
other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation
by Collateral Agent or the Lenders that might otherwise constitute
a defense available to, or a discharge of, Parent 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
Collateral Agent, the Lenders or any other entity upon the
insolvency, bankruptcy or reorganization of the Parent or otherwise
(and whether as a result of any demand, settlement, litigation or
otherwise), all as though such payment had not been made.
!
3.3
Waiver . 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 Collateral Agent or the Lenders exhaust
any right or take any action against any Borrower or any other
person or entity or any Collateral. 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 3.3 is knowingly made in contemplation of such
benefits. Guarantor hereby waives 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.
3.4
Continuing Guaranty; Assignments .
This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the later of the indefeasible cash payment
in full of the Guaranteed Obligations and all other amounts payable
under this Guaranty, the Subscription Agreements and the Notes, (b)
be binding upon Guarantor, its successors and assigns and (c) inure
to the benefit of and be enforceable by the Lenders and their
successors, pledgees, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender may pledge,
assign or otherwise transfer all or any portion of its rights and
obligations under this Guaranty (including, without limitation, all
or any portion of its Notes owing to it) to any other Person, and
such other Person shall thereupon become vested with all the
benefits in respect thereof granted such Collateral Agent or Lender
herein or otherwise.
3.5
Subrogati
