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GUARANTY AGREEMENT
THIS
GUARANTY AGREEMENT (this “
Guaranty ”)
is made as of September 28, 2007, by and between
XENI MEDICAL SYSTEMS, INC. ,
a
Delaware corporation (“
Debtor ”),
and VICIS CAPITAL MASTER FUND
(“
Vicis ”),
a
series of the Vicis Capital Master Trust, a trust formed under the
laws of the Cayman Islands .
RECITALS
A.
Debtor
is either a direct or an indirect wholly-owned subsidiary of
MD werks
,
Inc., a Delaware corporation (“
Issuer ”).
B.
Pursuant
to a Securities Purchase Agreement of even date herewith by
and between Vicis and Issuer (as amended or modified from time
to time, the “
Securities Purchase Agreement ”),
Issuer has issued to Vicis and Vicis has purchased from Issuer
$2,000,000 in shares of the Issuer’s Series B Convertible
Preferred Stock, par value $.001 per share (the “
Preferred Shares ”).
C.
It
is a condition precedent to Vicis’s acquisition of the
Preferred Shares that Guarantor execute and deliver to Vicis a
guaranty in the form hereof. This is the Guaranty Agreement
referred to in the Securities Purchase Agreement.
AGREEMENTS
In
consideration of the recitals and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Guarantor hereby agrees with Vicis as
follows:
ARTICLE I
DEFINITIONS
When
used in this Guaranty, capitalized terms shall have the
meanings specified in the Securities Purchase Agreement, the
preamble, the recitals and as follows:
Event of Default .
“Event of Default” shall have the meaning specified in
the Securities Purchase Agreement.
Guaranty .
“Guaranty” shall mean this Guaranty, as the same shall
be amended from time to time in accordance with the terms
hereof.
Law .
“Law”
shall mean any federal, state, local or other law, rule, regulation
or governmental requirement of any kind, and the rules,
regulations, interpretations and orders promulgated
thereunder.
Obligations .
“Obligations” shall mean (a) the redemption of, and
payment of dividends on, the Preferred Shares, and any renewal,
extension or refinancing thereof; and (b) all debts, liabilities,
obligations, covenants and agreements of Issuer and Debtor
contained in the Transaction Documents.
Person .
“Person”
shall mean and include an individual, partnership, corporation,
trust, unincorporated association and any unit, department or
agency of government.
ARTICLE II
THE GUARANTY
2.1
The Guaranty .
Guarantor, for itself, its successors and assigns, hereby
unconditionally and absolutely guarantees to Vicis the full and
complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of each of the Obligations.
This is a guaranty of payment and performance and not of
collection.
2.2
Waivers and Consents .
(a)
Guarantor
acknowledges that the obligations undertaken herein involve
the guaranty of obligations of a Person other than Guarantor
and, in full recognition of that fact, Guarantor consents and
agrees that Vicis may, to the extent permitted under the
Transaction Documents, at any time and from time to time,
without notice or demand, and without affecting the
enforceability or continuing effectiveness hereof: (i)
supplement, modify, amend, extend, renew, accelerate or
otherwise change the time for payment or the other terms of
the Obligations or any part thereof, including without
limitation any decrease of the principal amount thereof or the
rate(s) of interest thereon; (ii) supplement, modify, amend or
waive, or enter into or give any agreement, approval or
consent with respect to, the Obligations or any part thereof,
or any of the Transaction Documents or any additional security
or guaranties, or any condition, covenant, default, remedy,
right, representation or term thereof or thereunder; (iii)
accept new or additional instruments, documents or agreements
in exchange for or relative to any of the Transaction
Documents or the Obligations or any part thereof; (iv) accept
partial payments on the Obligations; (v) receive and hold
additional security or guaranties for the Obligations or any
part thereof; (vi) release, reconvey, terminate, waive,
abandon, fail to perfect, subordinate, exchange, substitute,
transfer and/or enforce any security or guaranties, and apply
any security and direct the order or manner of sale thereof as
Vicis in its sole and absolute discretion may determine; (vii)
release any Person from any personal liability with respect to
the Obligations or any part thereof; (viii) settle, release on
terms satisfactory to Vicis or by operation of applicable Law
or otherwise, liquidate or enforce any Obligations and any
security or guaranty in any manner, consent to the transfer of
any security and bid and purchase at any sale; and/or (ix)
consent to the merger, change or any other restructuring or
termination of the corporate existence of Issuer or any other
Person, and correspondingly restructure the Obligations, and
any such merger, change, restructuring or termination shall
not affect the liability of Guarantor or the continuing
effectiveness hereof, or the enforceability hereof with
respect to all or any part of the Obligations.
(b)
Upon
the occurrence and during the continuance of any Event of
Default, Vicis may enforce this Guaranty independently of any
other remedy, guaranty or security Vicis at any time may have
or hold in connection with the Obligations, and it shall not
be necessary for Vicis to marshal assets in favor of Issuer,
any other guarantor of the Obligations or any other Person or
to proceed upon or against and/or exhaust any security or
remedy before proceeding to enforce this Guaranty. Guarantor
expressly waives any right to require Vicis, upon the
occurrence and during the continuance of an Event of Default,
to marshal assets in favor of Issuer or any other Person or to
proceed against Issuer or any other guarantor of the
Obligations or any collateral provided by any Person, and
agrees that Vicis may proceed against any obligor and/or the
collateral in such order as it shall determine in its sole and
absolute discretion. Vicis may file a separate action or
actions against Guarantor, whether action is brought or
prosecuted with respect to any security or against any other
Person, or whether any other Person is joined in any such
action or actions. Guarantor agrees that Vicis and Issuer may
deal with each other in connection with the Obligations or
otherwise, or alter any contracts or agreements now or
hereafter existing between them, in any manner whatsoever, all
without in any way altering or affecting the security of this
Guaranty.
(c)
The
rights of Vicis hereunder shall be reinstated and revived, and
the enforceability of this Guaranty shall continue, with
respect to any amount at any time paid on account of the
Obligations which thereafter shall be required to be restored
or returned by Vicis upon the bankruptcy, insolvency or
reorganization of any Person, all as though such amount had
not been paid. The rights of Vicis created or granted herein
and the enforceability of this Guaranty shall remain effective
at all times to guarantee the full amount of all the
Obligations even though the Obligations, including any part
thereof or any other security or guaranty therefor, may be or
hereafter may become invalid or otherwise unenforceable as
against Issuer or any other guarantor of the Obligations and
whether or not Issuer or any other guarantor of the
Obligations shall have any personal liability with respect
thereto.
(d)
To
the extent permitted by applicable law, Guarantor expressly
waives any and all defenses now or hereafter arising or
asserted by reason of: (i) any disability or other defense of
Issuer or any other guarantor for the Obligations with respect
to the Obligations (other than full payment and performance of
all of the Obligations); (ii) the unenforceability or
invalidity of any security for or guaranty of the Obligations
or the lack of perfection or continuing perfection or failure
of priority of any security for the Obligations;
(iii) the cessation for any cause whatsoever of the
liability of Issuer or any other guarantor of the Obligations
(other than by reason of the full payment and performance of
all Obligations); (iv) any failure of Vicis to marshal assets
in favor of Issuer or any other Person; (v) any failure of
Vicis to give notice of sale or other disposition of
collateral to Issuer or any other Person liable for the
Obligations or any defect in any notice that may be given in
connection with any sale or disposition of collateral; (vi)
any failure of Vicis to comply with applicable Laws in
connection with the sale or other disposition of any
collateral or other security for any Obligation, including,
without limitation, any failure of Vicis to conduct a
commercially reasonable sale or other disposition of any
collateral or other security for any Obligation; (vii) any act
or omission of Vicis or others that directly or indirectly
results in or aids the discharge or release of Issuer or any
other guarantor of the Obligations, or of any security or
guaranty therefor by operation of Law or otherwise; (viii) any
fail
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