Exhibit 10.4

 

GUARANTY

 

New York, New York

  September 30, 2004

 

FOR VALUE RECEIVED, and in consideration of loans made or to be made or credit
otherwise extended or to be extended by Laurus Master Fund, Ltd. (“Lender”) to
or for the account of Dynamic Health Products, Inc., a Florida corporation
(“Borrower”), from time to time and at any time and for other good and valuable
consideration, and to induce Lender to make such loans or extensions of credit
and to make or grant such renewals, extensions, releases of collateral or
relinquishments of legal rights as 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 “Guarantor” or “the
undersigned”) unconditionally guaranties to Lender, its successors, endorsees
and assigns, the joint and several obligation of Borrower and Pharma Labs RX,
Inc., a Nevada corporation (“Pharma Labs” and, together with Borrower, the
“Credit Partes” and each, a “Credit Party”), to, upon the request of Lender, pay
to Lender an amount equal to the sum of (I) the product of (x) $6.00 multiplied
by (y) the number of shares of stock of GeoPharma, Inc. that constitutes
Collateral under the Supplemental Stock Pledge Agreement (as defined below) at
such time, plus (II) the product of (x) $4.00 multiplied by (y) the number of
shares of stock of Drugmax, Inc. that constitutes Collateral under the
Supplemental Stock Pledge Agreement at such time, which joint and several
obligation is more fully set forth in that certain Supplemental Stock Pledge
Agreement, dated as of the date hereof, among Borrower, Pharma Labs and the
Lender (as amended, modified or supplemented from time to time, the
“Supplemental Stock Pledge Agreement”) (such joint and several obligation is
collectively referred to herein as the “Obligations”), and irrespective of the
genuineness, validity, regularity or enforceability of such Obligations, or of
any instrument evidencing any of the Obligations or of any collateral therefor
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 either Credit Party under Title 11, United States
Code, including, without limitation, obligations or indebtedness of either
Credit Party 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.
In furtherance of the foregoing, the undersigned hereby agrees as follows:

 

1. No Impairment. 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, and may also make any agreement with either Credit Party 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 Lender and either Credit Party or any such other party or
person, or make any election of rights 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”)

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without in any way impairing or affecting this Guaranty. This instrument shall
be effective regardless of the subsequent incorporation, merger or consolidation
of either Credit Party, or any change in the composition, nature, personnel or
location of either Credit Party and shall extend to any successor entity to
either Credit Party, including a debtor in possession or the like under any
Insolvency Law.

 

2. Guaranty Absolute. The undersigned guarantees that the Obligations will be
paid and performed strictly in accordance with the terms of the Supplemental
Stock Pledge Agreement 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 either Credit Party with respect thereto. Guarantor hereby
knowingly accepts the full range of risk encompassed within a contract of
“continuing guaranty” which risk includes the possibility that either Credit
Party will contract additional indebtedness for which Guarantor may be liable
hereunder after such Credit Party’s financial condition or ability to pay its
lawful debts when they fall due has deteriorated, whether or not such Credit
Party has properly authorized incurring such additional indebtedness. The
undersigned acknowledges that (i) no oral representations, including any
representations to extend credit or provide other financial accommodations to
either Credit Party, have been made by Lender to induce the undersigned to enter
into this Guaranty and (ii) any extension of credit to either Credit Party shall
be governed solely by the provisions of agreements between the respective Credit
Party and the Lender. The liability 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
Supplemental Stock Pledge Agreement 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 the Supplemental Stock Pledge
Agreement 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 Lender or its assignees or any acceptance thereof or
any release of any security by Lender or its assignees, (d) any limitation on
any party’s liability or obligation under the Supplemental Stock Pledge
Agreement 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 either Credit Party, 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 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 Lender shall bear interest
until such amounts are paid in full at the highest rate then applicable to the
Obligations. Obligations include post-petition interest whether or not allowed
or allowable.

 

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3. Waivers. (a) This Guaranty is a guaranty of payment and not of collection.
Lender shall be under no obligation to institute suit, exercise rights or
remedies or take any other action against either Credit Party or any other
person liable with respect to any of the Obligations or resort to any collateral
security held by it to secure any of the Obligations as a condition precedent to
the undersigned being obligated to perform as agreed herein and Guarantor hereby
waives any and all rights which it may have by statute or otherwise which would
require Lender to do any of the foregoing. Guarantor further consents and agrees
that Lender shall be under no obligation to marshal any assets in favor of
Guarantor, 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 Lender, the Credit
Parties and/or the undersigned with respect to the undersigned’s obligations
under this Guaranty, or which either Credit Party 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) 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 either Credit Party’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 Lender, the
undersigned shall not be entitled to be subrogated to any of the rights of
Lender against either Credit Party or against any collateral or guarantee or
right of offset held by Lender for the payment of the Obligations, nor shall the
undersigned seek or be entitled to seek any contribution or reimbursement from
either Credit Party in respect of payments made by the undersigned hereunder,
until all amounts owing to Lender by the respective Credit Party on account of
the Obligations are paid in full and the Supplemental Stock Pledge Agreement 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 Supplemental Stock
Pledge Agreement shall not have been terminated, such amount shall be held by
the undersigned in trust for 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 Lender in the exact form
received by the undersigned (duly endorsed by the undersigned to Lender, if
required), to be applied against the Obligations, whether matured or unmatured,
in such order as Lender may determine, subject to the provisions of the
Supplemental Stock Pledge Agreement. Any and all present and future debts and
obligations of either Credit Party to any of the undersigned are hereby waived
and postponed in favor of, and subordinated to the full payment and performance
of, all present and future debts and obligations of such Credit Party to Lender.

 

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(d) The undersigned further waives the right to renounce any disposition or
transfer of assets whether created under a will, trust agreement or intestacy
statute, with respect to any devise, bequest, distributive share, trust account,
life insurance or annuity contract, employee benefit plan (including, without
limitation, any pension, retirement, death benefit, stock bonus or profit
sharing plan, system or trust), or any other disposition or transfer created by
any testamentary or nontestamentary instrument or by operation of law, and any
of the foregoing created or increased by reason of a renunciation made by
another person.

 

4. Security. All sums at any time to the credit of the undersigned and any
property of the undersigned in Lender’s possession or in the possession of any
bank, financial institution or other entity that directly or indirectly, through
one or more intermediaries, controls or is controlled by, or is under common
control with, Lender (each such entity, an “Affiliate”) shall be deemed held by
Lender or such Affiliate, as the case may be, as security for any and all of the
undersigned’s obligations to Lender and to any Affiliate of Lender, no matter
how or when arising and whether under this or any other instrument, agreement or
otherwise.

 

5. Representations and Warranties. The undersigned hereby represents and
warrants (all of which representations and warranties shall survive until all
Obligations are indefeasibly satisfied in full and the Loan Agreement has been
irrevocably terminated), that:

 

(a) Legal Capacity. The undersigned has full legal capacity to execute and
deliver this Guaranty and to perform the obligations of the undersigned under
this Guaranty.

 

(b) Legal, Valid and Binding Character. This Guaranty constitutes the legal,
valid and binding obligation of the undersigned enforceable in accordance with
its terms, except as enforceability may be limited by applicable Insolvency Law.

 

(c) Violations. The execution, delivery and performance of this Guaranty will
not violate any requirement of law applicable to the undersigned or any material
contract, agreement or instrument to which the undersigned is a party or by
which the undersigned or any property of the undersigned is bound or result in
the creation or imposition of any mortgage, lien or other encumbrance other than
to Lender on any of the property or assets of the undersigned pursuant to the
provisions of any of the foregoing.

 

(d) Consents or Approvals. No consent of any other person or entity (including,
without limitation, any creditor of the undersigned) and no consent, license,
permit, approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is required
in connection with the execution, delivery, performance, validity or
enforceability of this Guaranty.

 

(e) Litigation. No litigation, arbitration, investigation or administrative
proceeding of or before any court, arbitrator or governmental authority, bureau
or agency is currently pending or, to the best knowledge of the undersigned,
threatened (i) with respect to this Guaranty or any of the transactions
contemplated by this Guaranty or (ii) against or affecting the undersigned, or
any property or assets of the undersigned, which, if adversely determined, would
have a material adverse effect on the business, operations, assets or condition,
financial or otherwise, of the undersigned.

 

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(f) Financial Benefit. The undersigned has derived or expects to derive a
financial or other advantage from each and every loan, advance or extension of
credit made under the Supplemental Stock Pledge Agreement or other obligation
incurred by either Credit Party to Lender.

 

6. Acceleration. (a) If any Event of Default (as defined in the Supplemental
Stock Pledge Agreement) shall have occurred and be continuing, any and all
Obligations shall for purposes hereof, at Lender’s option, be deemed due and
payable without notice notwithstanding that any such Obligation is not then due
and payable by Borrower.

 

(b) The undersigned will promptly notify Lender of any default by the
undersigned in the performance or observance of any term or condition of any
agreement to which the undersigned is a party if the effect of such default is
to cause, or permit the holder of any obligation under such agreement to cause,
such obligation to become due prior to its stated maturity and, if such an event
occurs, Lender shall have the right to accelerate the undersigned’s obligations
hereunder.

 

7. Payments from Guarantor. Lender, in its sole and absolute discretion, with or
without notice to the undersigned, may apply on account of the Obligations any
payment from the undersigned or any other guarantor, or amounts realized from
any security for the Obligations, or may deposit any and all such amounts
realized in a non-interest bearing cash collateral deposit account to be
maintained as security for the Obligations.

 

8. Costs. The undersigned shall pay on demand, all costs, fees and expenses
(including expenses for legal services of every kind) relating or incidental to
the enforcement or protection of the rights of Lender hereunder or under any of
the Obligations.

 

9. No Termination. This is a continuing irrevocable guaranty and shall remain in
full force and effect and be binding upon the undersigned, and the undersigned’s
heirs, administrators, executors, successors and assigns, until all of the
Obligations have been paid in full and the Loan Agreement has been irrevocably
terminated. If any of the present or future Obligations are guarantied by
persons, partnerships or corporations in addition to the undersigned, the death,
release or discharge in whole or in part or the bankruptcy, merger,
consolidation, incorporation, liquidation or dissolution of one or more of them
shall not discharge or affect the liabilities of the undersigned under this
Guaranty. The death of the undersigned shall not effect a termination of this
Guaranty and loans and advances made by Lender and any indebtedness incurred by
either Credit Party from Lender subsequent to such death shall continue to
constitute Obligations guaranteed hereunder.

 

10. Recapture. Anything in this Guaranty to the contrary notwithstanding, if
Lender receives any payment or payments on account of the liabilities guaranteed
hereby, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver, or any other party under any
Insolvency Law, common law or equitable doctrine, then to the extent of any sum
not finally retained by Lender, the undersigned’s obligations to Lender shall be
reinstated and this Guaranty shall remain in full force and effect (or be
reinstated) until payment shall have been made to Lender, which payment shall be
due on demand.

 

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11. Books and Records. The books and records of Lender showing the account
between Lender and Borrower shall be admissible in evidence in any action or
proceeding, shall be binding upon the undersigned for the purpose of
establishing the items therein set forth and shall constitute prima facie proof
thereof.

 

12. No Waiver. No failure on the part of Lender to exercise, and no delay in
exercising, any right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by Lender of any right, remedy
or power hereunder preclude any other or future exercise of any other legal
right, remedy or power. Each and every right, remedy and power hereby granted to
Lender or allowed it by law or other agreement shall be cumulative and not
exclusive of any other, and may be exercised by Lender at any time and from time
to time.

 

13. Waiver of Jury Trial. THE UNDERSIGNED DOES HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED
ON OR WITH RESPECT TO THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR RELATING OR INCIDENTAL HERETO. THE UNDERSIGNED DOES HEREBY CERTIFY
THAT NO REPRESENTATIVE OR AGENT OF LENDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.

 

14. Governing Law; Jurisdiction; Amendments. THIS INSTRUMENT CANNOT BE CHANGED
OR TERMINATED ORALLY, AND SHALL BE GOVERNED, CONSTRUED AND INTERPRETED AS TO
VALIDITY, ENFORCEMENT AND IN ALL OTHER RESPECTS IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. THE UNDERSIGNED EXPRESSLY CONSENTS TO THE JURISDICTION
AND VENUE OF THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK, AND
OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR
ALL PURPOSES IN CONNECTION HEREWITH. ANY JUDICIAL PROCEEDING BY THE UNDERSIGNED
AGAINST LENDER INVOLVING, DIRECTLY OR INDIRECTLY ANY MATTER OR CLAIM IN ANY WAY
ARISING OUT OF, RELATED TO OR CONNECTED HEREWITH SHALL BE BROUGHT ONLY IN THE
SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK OR THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE UNDERSIGNED FURTHER
CONSENTS THAT ANY SUMMONS, SUBPOENA OR OTHER PROCESS OR PAPERS (INCLUDING,
WITHOUT LIMITATION, ANY NOTICE OR MOTION OR OTHER APPLICATION TO EITHER OF THE
AFOREMENTIONED COURTS OR A JUDGE THEREOF) OR ANY NOTICE IN CONNECTION WITH ANY
PROCEEDINGS HEREUNDER, MAY BE SERVED INSIDE OR OUTSIDE OF THE STATE OF NEW YORK
OR THE SOUTHERN DISTRICT OF NEW YORK BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, OR BY PERSONAL SERVICE PROVIDED A REASONABLE TIME FOR
APPEARANCE IS PERMITTED, OR IN SUCH OTHER MANNER AS MAY BE PERMISSIBLE UNDER THE
RULES OF SAID COURTS. THE UNDERSIGNED WAIVES ANY OBJECTION TO JURISDICTION AND
VENUE OF ANY ACTION INSTITUTED HEREON AND SHALL NOT ASSERT ANY DEFENSE BASED ON
LACK OF JURISDICTION OR VENUE OR BASED UPON FORUM NON CONVENIENS.

 

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15. Severability. To the extent permitted by applicable law, any provision of
this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

16. Amendments, Waivers. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by the undersigned therefrom shall in any
event be effective unless the same shall be in writing executed by the
undersigned and Lender.

 

17. Notice. All notices, requests and demands to or upon the undersigned, shall
be in writing and shall be deemed to have been duly given or made (a) when
delivered, if by hand, (b) three (3) days after being sent, postage prepaid, if
by registered or certified mail, (c) when confirmed electronically, if by
facsimile, or (d) when delivered, if by a recognized overnight delivery service
in each event, to the numbers and/or address set forth beneath the signature of
the undersigned.

 

18. Successors. Lender may, from time to time, without notice to the
undersigned, sell, assign, transfer or otherwise dispose of all or any part of
the Obligations and/or rights under this Guaranty. Without limiting the
generality of the foregoing, Lender may assign, or grant participations to, one
or more banks, financial institutions or other entities all or any part of any
of the Obligations. In each such event, Lender, its Affiliates and each and
every immediate and successive purchaser, assignee, transferee or holder of all
or any part of the Obligations shall have the right to enforce this Guaranty, by
legal action or otherwise, for its own benefit as fully as if such purchaser,
assignee, transferee or holder were herein by name specifically given such
right.

 

19. Release. Nothing except cash payment in full of the Obligations shall
release the undersigned from liability under this Guaranty.

 

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IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned this 30th
day of September, 2004.

 

JUGAL K TANEJA

/s/ Jugal K. Taneja

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Address: 7270 Sawgrass Point Dr.

Pinellas Park, FL 33782

Telephone No.: (727) 480-9500

Facsimile No.: (727) 548-1917

 

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