GUARANTY OF COLLECTION
THIS GUARANTY OF COLLECTION (this “Guaranty”) is made as of June 4, 2009, by WILLIAM J. CARAGOL (the “Guarantor”) to and for the benefit of VERICHIP CORPORATION, a Delaware corporation (“VeriChip”), and solely for purposes of Section 8 hereof, between Guarantor and STEEL VAULT CORPORATION, a Delaware corporation (“Borrower”).
R E C I T A L S :
A. Provided that VeriChip receives a guaranty of collection from the Guarantor with respect to the Liabilities (as defined below), VeriChip is willing to purchase a secured convertible promissory note issued by Borrower in the aggregate principal amount of $500,000 (the “Note”), which is secured by a security agreement, dated as of the date hereof, between Borrower and VeriChip and by a security agreement, dated as of the date hereof, between National Credit Report.com, LLC and VeriChip (collectively, the “Security Agreements”).
B. In exchange for providing this Guaranty, the Guarantor will receive a common stock purchase warrant to purchase 500,000 shares of common stock of Borrower (the “Warrant”).
NOW, THEREFORE, to induce VeriChip to purchase the Note from Borrower and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Guarantor agrees with VeriChip as follows:
1. Guaranty . The Guarantor guarantees to VeriChip full and prompt collection of up to the principal amount due under the Note of and all accrued and unpaid interest thereon, but not any fees or other amounts of any kind whatsoever that shall be due to VeriChip by Borrower (the “Liabilities”).
2. Guaranty of Collection . This is a guaranty of collection only, and not a guaranty of payment. Before enforcing this Guaranty, (i) VeriChip first must foreclose upon any collateral securing the Note pursuant to the Security Agreements, (ii) VeriChip must use reasonable efforts to obtain judgment against Borrower, (iii) VeriChip must use reasonable efforts to execute on any judgment obtained against Borrower, and (iv) following execution of any such judgment, a portion of the sums due under the Note constituting liabilities hereunder must remain unpaid; provided, however , if Borrower becomes the debtor in (A) any voluntary or (B) any involuntary bankruptcy case which is not dismissed within 60 days, then VeriChip immediately may enforce this Guaranty against Guarantor.
3. Termination of Guaranty . This Guaranty shall remain in effect and will not terminate until the Liabilities have been paid in full.
4. Waivers . The Guarantor waives (i) notice of acceptance of this Guaranty, (ii) all presentments and protests, and (iii) notice of dishonor.
5. Obligations Absolute . Except as set forth in this Guaranty, the Guarantor’s obligations are in all respects absolute and unconditional and will not be impaired, modified, released or limited by any occurrence or condition whatsoever, including, without limitation,
(i) any modification, discharge, renewal or extension of the Liabilities or the Note, or any amendment, modification or stay of VeriChip’s rights under the Note which may occur in any bankruptcy or reorganization case or proceeding concerning Borrower, whether permanent or temporary and whether or not assented to by VeriChip, (ii) any notice of withdrawal of this Guaranty, at any time and from time to time before, at or after maturity of the Note, (iii) any substitution or exchange, in whole or in part, of any collateral or any security held in connection with the Note, (iv) any furnishing of additional collateral for the Note, (v) any determination that any collateral has become impaired or that any security interest taken by VeriChip to secure the Note is invalid or unperfected, (vi) any determination that any signatures on behalf of Borrower on the Note are not genuine or that the Note is not the legal, valid and binding obligation of Borrower, or (vii) any defenses which Borrower may have as to any sums due under the Note.
6. Waiver of Subrogation . Until the Liabilities have been paid in full, the Guarantor irrevocably waives, relinquishes and renounces any right of subrogation, contribution, indemnity, reimbursement or any claim whatsoever which the Guarantor may have against Borrower or any other guarantors liable on the Note arising out of, or in any way connected with, the documents evidencing, securing, guaranteeing or otherwise relating to the Note (the “Loan Documents”). The Guarantor will not assert any such claim against Borrower or any such guarantor, in any proceeding, legal or equitable, including any bankruptcy, insolvency or reorganization proceeding, before VeriChip is paid in full for the Liabilities. This provision will inure to the benefit of and will be enforceable by VeriChip, Borrower and any such guarantors, and their successors and assigns, including any trustee in bankruptcy or debtor-in-possession. This provision will not prevent the Guarantor from asserting a claim against Borrower or any such guarantors once the Liabilities have been fully paid to VeriChip. Once the Liabilities have been paid in full, if the Guarantor has made any payment to VeriChip under this Guaranty, then VeriChip will assign to the Guarantor, to the extent of such payment, VeriChip’s interest in the Loan Documents and any judgments against Borrower.
7. Reinstatement of Guaranteed Liabilities . The Guarantor acknowledges and agrees that the Guarantor’s obligations hereunder shall apply to and continue with respect to any amount paid to VeriChip on the Liabilities which is subsequently recovered from VeriChip for any reason whatsoever (including, without limitation, as a result of any bankruptcy, in