GUARANTY
1.
Identification .
This Guaranty (the “Guaranty”), dated as of
August 14, 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 on May 22,
2009 and 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 on May 22, 2009 and 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
1
Obligations, and a separate action or actions
may be brought and prosecuted against Guarantor to enforce 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.
©A
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.
2
3.5
Subrogation . Guarantor will not exercise any rights that it
may now or hereafter acquire against the Collateral Agent or any
Lender or other Guar
