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Exhibit 99.5
SUBSIDIARY GUARANTY
New York, New
York
December 19, 2006
FOR VALUE RECEIVED, and in consideration of note purchases from,
loans made or to be made or credit otherwise extended or to be
extended by Shelter Island Opportunity Fund, LLC (the "Lender") to
or for the account of Host America Corp., a Colorado corporation
("Debtor"), from time to time and at any time and for other good
and valuable consideration and to induce the Lender, in its
discretion, to purchase such notes, make such loans or extensions
of credit and to make or grant such renewals, extensions, releases
of collateral or relinquishments of legal rights as the Lender may
deem advisable, the undersigned (and each of them if more than one,
the liability under this Guaranty being joint and several) (jointly
and severally referred to as "Guarantors" or "the undersigned")
unconditionally guaranties to the Lender, their successors,
endorsees and assigns, the prompt payment when due (whether by
acceleration or otherwise) of all present and future obligations
and liabilities of any and all kinds of Debtor to the Lender and of
all instruments of any nature evidencing or relating to any such
obligations and liabilities upon which Debtor is or may become
liable to the Lender, whether incurred by Debtor as maker,
endorser, drawer, acceptor, guarantor, accommodation party or
otherwise, and whether due or to become due, secured or unsecured,
absolute or contingent, joint or several, and however or whenever
acquired by the Lender, whether arising under, out of, or in
connection with (i) that certain Securities Purchase Agreement
dated as of the date hereof by and between Debtor and the Lender
(the "Securities Purchase Agreement") and (ii) each Related
Agreement referred to in the Securities Purchase Agreement, (the
Securities Purchase Agreement and each Related Agreement, as each
may be amended, modified, restated or supplemented from time to
time, are collectively referred to herein as the "Documents"), or
any documents, instruments or agreements relating to or executed in
connection with the Documents or any documents, instruments or
agreements referred to therein or otherwise, or any other
indebtedness, obligations or liabilities of Debtor to the Lender,
whether now existing or hereafter arising, direct or indirect,
liquidated or unliquidated, absolute or contingent, due or not due
and whether under, pursuant to or evidenced by a note, agreement,
guaranty, instrument or otherwise (all of which are herein
collectively referred to as the "Obligations"), or of the existence
or extent of such collateral, and irrespective of the allowability,
allowance or disallowance of any or all of the Obligations in any
case commenced by or against Debtor under Title 11, United States
Code, including, without limitation, obligations or indebtedness of
Debtor for post-petition interest, fees, costs and charges that
would have accrued or been added to the Obligations but for the
commencement of such case. Terms not otherwise defined herein shall
have the meaning assigned such terms in the Securities Purchase
Agreement. In furtherance of the foregoing, the undersigned hereby
agrees as follows:
1. No Impairment . The Lender may at any time
and from time to time, either before or after the maturity thereof,
without notice to or further consent of the undersigned, extend the
time of payment of, exchange or surrender any collateral for, renew
or extend any of the Obligations or increase or decrease the
interest rate thereon, or
enter into any other agreement with Debtor or with any other
party to or person liable on any of the Obligations, or interested
therein, for the extension, renewal, payment, compromise, discharge
or release thereof, in whole or in part, or for any modification of
the terms thereof or of any agreement between the Lender and Debtor
or any such other party or person, or make any election of rights
the Lender may deem desirable under the United States Bankruptcy
Code, as amended, or any other federal or state bankruptcy,
reorganization, moratorium or insolvency law relating to or
affecting the enforcement of creditors’ rights generally (any
of the foregoing, an "Insolvency Law") without in any way impairing
or affecting this Guaranty. This instrument shall be effective
regardless of the subsequent incorporation, merger or consolidation
of Debtor, or any change in the composition, nature, personnel or
location of Debtor and shall extend to any successor entity to
Debtor, including a debtor in possession or the like under any
Insolvency Law.
2. Guaranty Absolute . Each of the
undersigned jointly and severally guarantees that the Obligations
will be paid strictly in accordance with the terms of the Documents
and/or any other document, instrument or agreement creating or
evidencing the Obligations, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of Debtor with respect thereto.
Guarantors hereby knowingly accept the full range of risk
encompassed within a contract of "continuing guaranty" which risk
includes the possibility that Debtor will contract additional
indebtedness for which Guarantors may be liable hereunder after
Debtor’s financial condition or ability to pay its lawful
debts when they fall due has deteriorated. The undersigned
acknowledge that (i) no oral representations, including any
representations to extend credit or provide other financial
accommodations to Debtor, have been made by the Lender to induce
the undersigned to enter into this Guaranty and (ii) any extension
of credit to Debtor shall be governed solely by the provisions of
the Documents. The liability of each of the undersigned under this
Guaranty shall be absolute and unconditional, in accordance with
its terms, and shall remain in full force and effect without regard
to, and shall not be released, suspended, discharged, terminated or
otherwise affected by, any circumstance or occurrence whatsoever,
including, without limitation: (a) any waiver, indulgence, renewal,
extension, amendment or modification of or addition, consent or
supplement to or deletion from or any other action or inaction
under or in respect of the Documents, or any other instruments or
agreements relating to the Obligations or any assignment or
transfer of any thereof, (b) any lack of validity or enforceability
of any Document, or other documents, instruments or agreements
relating to the Obligations or any assignment or transfer of any
thereof, (c) any furnishing of any additional security to the
Lender or their assignees or any acceptance thereof or any release
of any security by the Lender or their assignees, (d) any
limitation on any party’s liability or obligation under the
Documents, or any other documents, instruments or agreements
relating to the Obligations or any assignment or transfer of any
thereof or any invalidity or unenforceability, in whole or in part,
of any such document, instrument or agreement or any term thereof,
(e) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding
relating to Debtor, or any action taken with respect to this
Guaranty by any trustee or receiver, or by any court, in any such
proceeding, whether or not the undersigned shall have notice or
knowledge of any of the foregoing, (f) any exchange, release or
nonperfection of any collateral, or any release, or amendment or
waiver of or consent to departure from any
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guaranty or security, for all or any of the Obligations or (g)
any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the undersigned. Any amounts due
from the undersigned to the Lender shall bear interest until such
amounts are paid in full at the rate then applicable to the
Obligations as set forth in the Documents. Obligations include
post-petition interest whether or not allowed or allowable.
3. Waivers .
(a) This Guaranty is a guaranty of payment and not of
collection. The Lender shall be under no obligation to institute
suit, exercise rights or remedies or take any other action against
Debtor or any other person liable with respect to any of the
Obligations or resort to any collateral security held by them to
secure any of the Obligations as a condition precedent to the
undersigned being obligated to perform as agreed herein and each
Guarantor hereby waives any and all rights which it may have by
statute or otherwise which would require the Lender to do any of
the foregoing. Each Guarantor further consents and agrees that the
Lender shall be under no obligation to marshal any assets in favor
of Guarantors, or against or in payment of any or all of the
Obligations. The undersigned hereby waives all suretyship defenses
and any rights to interpose any defense, counterclaim or offset of
any nature and description which the undersigned may have or which
may exist between and among the Lender, Debtor and/or the
undersigned with respect to the undersigned’s obligations
under this Guaranty, or which Debtor may assert on the underlying
debt, including but not limited to failure of consideration, breach
of warranty, fraud, payment (other than cash payment in full of the
Obligations), statute of frauds, bankruptcy, infancy, statute of
limitations, accord and satisfaction, and usury.
(b) Each of the undersigned further waives (i) notice
of the acceptance of this Guaranty, of the making of any such loans
or extensions of credit, and of all notices and demands of any kind
to which the undersigned may be entitled, including, without
limitation, notice of adverse change in Debtor’s financial
condition or of any other fact which might materially increase the
risk of the undersigned and (ii) presentment to or demand of
payment from anyone whomsoever liable upon any of the Obligations,
protest, notices of presentment, non-payment or protest and notice
of any sale of collateral security or any default of any sort.
(c) Notwithstanding any payment or payments made by
the undersigned hereunder, or any setoff or application of funds of
the undersigned by the Lender, the undersigned shall not be
entitled to be subrogated to any of the rights of the Lender
against Debtor or against any collateral or guarantee or right of
offset held by the Lender for the payment of the Obligations, nor
shall the undersigned seek or be entitled to seek any contribution
or reimbursement from Debtor in respect of payments made by the
undersigned hereunder, until all amounts owing to the Lender by
Debtor on account of the Obligations are paid in full and the
Lender’s obligation to extend credit pursuant to the
Documents has been terminated. If, notwithstanding the foregoing,
any amount shall be paid to the undersigned on account of such
subrogation rights at any time when all of the Obligations shall
not have been paid in full and the Lender’s obligation to
extend credit pursuant to the Documents shall not have been
terminated, such amount shall be
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held by the undersigned in trust for the Lender, segregated from
other funds of the undersigned, and shall forthwith upon, and in
any event within two (2) business days of, receipt by the
undersigned, be turned over to the Lender in the exact form
received by the undersigne
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