<PAGE>
                                                                   EXHIBIT 10.17

                                      BB&T
                               GUARANTY AGREEMENT

BRANCH BANKING AND TRUST COMPANY                               September 1, 2004

Dear Sirs:

      As an inducement to Branch Banking and Trust Company ("Bank") to extend
credit to and to otherwise deal with ABSORPTION CORP ("Borrower") and, in
consideration thereof, the undersigned (and each of the undersigned jointly and
severally if more than one) hereby absolutely and unconditionally guarantees to
bank and its successors and assigns the due and punctual payment of any and all
notes, drafts, debts, obligations and liabilities, primary or secondary (whether
by way of endorsement or otherwise), of Borrower, at any time, now or hereafter,
incurred with or held by Bank, together with interest, as and when the same
become due and payable, whether by acceleration or otherwise, in accordance with
the terms of any such notes, drafts, debts, obligations or liabilities or
agreements evidencing any such indebtedness, obligation or liability including
all renewals, extensions and modifications thereof. The obligation of the
undersigned is a guarantee of payment and not of collection.

      The undersigned is Bank's debtor for all indebtedness, obligations and
liabilities for which this Guaranty is made, and Bank shall also at all times
have a lien on and security interest in all stocks, bonds and other securities
of the undersigned at any time in Bank's possession and the same shall at Bank's
option be held, administered and disposed of as collateral to any such
indebtedness, obligation or liability of the Borrower, and Bank shall also at
all times have the right of set-off against any deposit account of the
undersigned with Bank in the same manner and to the same extent that the right
of set-off may exist against the Borrower.

      It is understood that any such notes, drafts, debts, obligations and
liabilities may be accepted or created by or with Bank at any time and from time
to time without notice to the undersigned, and the undersigned hereby expressly
waives presentment, demand, protest, and notice of dishonor of any such notes,
drafts, debts, obligations and liabilities or other evidences of any such
indebtedness, obligation or liability.

      Bank may receive and accept from time to time any securities or other
property as collateral to any such notes, drafts, debts, obligations and
liabilities, and may surrender, compromise, exchange and release absolutely the
same or any part thereof at any time without notice to the undersigned and
without in any manner affecting the obligation and liability of the undersigned
hereby created, The undersigned agrees that Bank shall have no obligation to
protect, perfect, secure or insure any security interests, liens or encumbrances
now or hereafter held for the indebtedness, obligations and liabilities for
which this Guaranty is made.

      If allowed by applicable law, the undersigned hereby subordinates any and
all indebtedness of Borrower now or hereafter owed to the undersigned to all
indebtedness of Borrower in favor of Bank, and agrees with Bank that the
undersigned shall not demand or accept any payment of principal or interest from
Borrower, shall not claim any offset or other reduction of the undersigned's
obligations hereunder because of any such indebtedness and shall not take any
action to obtain any of the security described In and encumbered by the
documents evidencing the indebtedness owed by Borrower ("Loan Documents");
provided, however, that, if Bank so requests, such indebtedness shall be
collected, enforced and received by the undersigned as trustee for Bank and
shall be paid over to Bank on account of the indebtedness of Borrower to Bank,
but without reducing or affecting any manner the liability of the undersigned
under the other provisions of this Guaranty Agreement.

      This obligation and liability on the part of the undersigned shall be a
primary, and not a secondary, obligation and liability, payable immediately upon
demand without recourse first having been had by Bank against the Borrower or
any other guarantor, person, firm or corporation, and without first resorting to
any property held by Bank as collateral security; and the undersigned hereby
waives the benefits of all provisions of law, including but not limited to the
provisions of O.C.G.A, section 10-7-24 or its successor, for stay or delay of
execution or sale of property or other satisfaction of judgment against the
undersigned on account of obligation and liability hereunder until judgment be
obtained therefor against the Borrower and execution thereon returned
unsatisfied, or until it is shown that the Borrower has no property available
for the satisfaction of the indebtedness, obligation or liability guaranteed
hereby, or until any other proceedings can be had; and the undersigned hereby
agrees to indemnify the Bank for all costs of collection, including but not
limited to the costs of repossession, foreclosure, reasonable attorneys' fees,
and court costs incurred by the Bank in the event that the Bank should first be
required by the undersigned to resort to any property held by the Bank or in
which the Bank has a security interest or to obtain execution or other
satisfaction of a judgment against the Borrower on account of Borrower's
obligation and liability for its indebtedness guaranteed hereby; and the
undersigned further agrees that the undersigned is responsible for any
obligation or debt, or portion thereof, of the Borrower to the Bank which has
been paid by the Borrower to the Bank and which the Bank is subsequently
required to return, to the Borrower or a trustee for the Borrower in any
bankruptcy or insolvency proceeding; and the undersigned further agrees that
none of the undersigned shall have any right of subrogation, reimbursement or
indemnity whatsoever, nor any right of recourse to security for the debts and
obligations of the Borrower to Bank unless and until all of the debts and
obligations of the Borrower to Bank have been paid in full. The undersigned
hereby waives, to the extent avoidable under any provision of the Bankruptcy
Code, any right arising upon payment by the undersigned of any obligation under
this Guaranty to assert a claim against the bankruptcy estate of the Borrower.

      In addition to the other waivers set forth elsewhere in this Guaranty, the
undersigned also hereby waives and agrees not to assert or take advantage of (a)
if allowed by applicable law, the defense of the statute of limitations in any
action hereunder or for the collection of the indebtedness or the performance of
any obligation hereby guaranteed; (b) any defense that may arise by reason of
the incapacity, lack of authority, death or disability of the undersigned,
Borrower, or any other party or entity, or the failure of Bank to file or
enforce a claim against the estate (either in administration, bankruptcy or any
other proceeding) of Borrower or any other party or entity; (c) any defense
based upon the failure of Bank to give notice of the existence, creation or
incurring of any new or additional indebtedness or obligation or the failure of
Bank to

ACCOUNT # / NOTE #                                            Initials: ________

1457GA (0311)                                                        Page 1 of 3

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give notice of the existence, creation or incurring of any new or additional
indebtedness or obligation or the failure of Bank to give notice of any action
or non-action on the part of any other party whomsoever, in connection with any
obligation hereby guaranteed; (d) any defense based upon an election of remedies
by Bank which destroys or otherwise impairs any subrogation rights of the
undersigned to proceed against Borrower for reimbursement, or both; (e) any
defense based upon failure of Bank to commence an action against Borrower or any
other guarantor of the indebtedness guaranteed hereby; (f) any duty of the part
of Bank to disclose to the undersigned any fact that it may know or hereafter
know regarding Borrower; (g) acceptance or notice of acceptance of this Guaranty
by Bank; (h) as stated above, notice of presentment and demand for payment of
any of the Indebtedness or performance of any of the obligations hereby
guaranteed except as otherwise required in this Guaranty; (i) as set forth
above, protest and notice of dishonor or of default to the undersigned or to any
other party with respect to the indebtedness or performance of obligations
hereby guaranteed; (j) except as otherwise provided herein, any and all other
notices whatsoever to which the undersigned might otherwise be entitled; (k) any
defense based on lack of due diligence by the Bank and the collection,
protection or realization upon any collateral securing the indebtedness
evidenced by the Note or any of the other Loan Documents, or both; (I) any
transfer by Borrower of all or any part of the security encumbered by the Loan
Documents; and (m) any other legal or equitable defenses whatsoever to which the
undersigned might be entitled, to the extent permitted by law, unless such
defenses are based upon the willful misconduct of the Bank.

      In the event of the occurrence of a "Default" or "Event of Default"
otherwise relating to the indebtedness evidenced by the Note(s) or evidenced or
secured by any of the other Loan Documents or any of them, or relating to the
transactions contemplated by the Loan Documents or any of them in any order, all
rights powers and remedies available to Bank in such event shall be
non-exclusive and cumulative of all other rights, powers and remedies provided
thereunder or hereunder or by law or in equity. Accordingly, the undersigned
hereby authorizes and empowers Bank upon the occurrence of Default or Event of
Default under the Note(s) or Loan Documents, at its sole discretion, and, except
as otherwise provided herein, without notice to the undersigned, to exercise and
cause to be exercised any right or remedy which Bank may have, including, but
not limited to, judicial foreclosure, non-judicial foreclosure by exercise of
power of sale, acceptance of a deed or assignment in lieu of foreclosure,
appointment of a receiver to collect rents and profits, exercise of remedies
against personal property, or enforcement of any assignment of leases, rents,
profits, accounts and certificates of deposit, or any other security, whether
real, personal or tangible or intangible, at any public or private sale of any
security or collateral for any indebtedness or any part hereof guaranteed
hereby, whether by foreclosure or otherwise, Bank may, in its discretion,
purchase all of any part of such security or collateral so sold or offered for
sale for its own account and may apply against the amount bid therefor the
balance due it pursuant to the Note(s) or any of the other Loan Documents
without prejudice to Bank's remedies hereunder against the undersigned for
deficiencies, if allowed by applicable law. If the indebtedness guaranteed
hereby is partially paid by reason of the election of Bank, its successors,
endorsees or assigns, to pursue any of the remedies available to Bank or if such
indebtedness is otherwise partially paid, then this Guaranty shall nevertheless
remain in full force and effect, and the undersigned shall remain liable for the
entire balance of the indebtedness guaranteed hereby, even though any rights
which the undersigned may have against Borrower may be destroyed or diminished
by the exercise of any such remedy.

Check applicable box:

[X]   This Guaranty is unlimited and applies to all indebtedness of Borrower,
      whether now existing or hereafter arising.

[ ]   This Guaranty applies to all indebtedness of Borrower evidenced by its
      promissory note number _____ dated ____________________ (including all
      extensions, renewals, and additional advances and modifications thereof)
      in the initial principal amount of $________________.

[ ]   This Guaranty is limited to an amount of $______________________ plus
      accrued interest, late fees, costs of collection and reasonable attorneys'
      fees and all other obligations and indebtedness which may accrue or be
      incurred with respect to the Borrower's indebtedness and obligations to
      Bank

      To secure the payment of all obligations of the undersigned hereunder, the
undersigned hereby grants a security interest and lien in the following goods
and property owned by the undersigned:

N/A
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

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("Collateral"). The undersigned hereby agrees to execute and deliver to Bank any
security agreement, security deed, mortgage, UCC financing statement, or other
document required by the Bank in order to protect its security interest or lien
in the Collateral. This document shall constitute a security agreement under the
Uniform Commercial Code of Georgia ("Code"), and in addition to having all other
legal rights and remedies, the Bank shall have all rights and remedies of a
secured party under the Code.

      The undersigned covenants to (i) deliver to Bank, as soon as available
each year, complete copies (including all schedules) of all British Columbia and
Canadian tax returns filed by Guarantor; and (ii) not, without the prior written
consent of Bank, transfer or sell more than 20% of is ownership interest in
Borrower.

      This agreement shall inure to the benefit of Bank, its successors and
assigns, and the owners and holders of any of the indebtedness, obligations and
liabilities hereby guaranteed, and shall remain in force until a written notice
revoking it has been received by Bank; but such revocation shall not release the
undersigned from liability to Bank, its successors and assigns, or the owners
and holders of any of the indebtedness, obligations and liabilities hereby
guaranteed, for any indebtedness, obligation or liability of the Borrower which
is hereby guaranteed and then in existence or from any renewals, additional
advances, extensions or modifications thereof in whole or in part, whether such
renewals, additional advances, extensions or modifications are made before or
after such revocation, with or without notice to the undersigned. The
undersigned waives presentment, demand, protest and notices of every kind and
assents to any one or more extensions, modifications, additional advances,
renewals or postponements of the time or amount of payment or any other
Indulgences given to Borrower. The undersigned shall be responsible for and
shall reimburse the Bank for all costs and expenses and reasonable attorneys'
fees incurred by the Bank in connection with the enforcement of this Guaranty or
the protection or preservation of any right or claim of the Bank in connection
herewith, including without limitation costs and expenses incurred by the Bank
in connection with its attempts to collect the indebtedness, obligations, and
liabilities guaranteed hereby. Time is of the essence of this Agreement.

      If the Borrower is an organization, this instrument covers all
indebtedness, obligations and liabilities to Bank purporting to be made or
undertaken on behalf of such organization by any such officer or agent of said
organization without regard to the actual authority of such officer or agent.
The term "organization" shall include associations of all kinds and all
purported corporations, partnership, limited liability companies and the like,
whether correctly and legally chartered and organized.

1457GA (0311)                                                        Page 2 of 3


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      The undersigned covenants, warrants, and represents to the Bank that: (i)
this guaranty is enforceable against the undersigned in accordance with its
terms; (ii) the execution and delivery of this Guaranty does not violate or
constitute a breach of any agreement to which the undersigned is a party; (iii)
that there is no litigation, claim, action or proceeding pending or, to the best
knowledge of the undersigned, threatened against the undersigned which would
materially adversely affect the financial condition of the undersigned or his
ability to fulfill his obligations hereunder; (iv) that the undersigned has
knowledge of the Borrower's financial condition and affairs; and (v) unless
otherwise required in a Loan Agreement, if applicable, as long as any
Obligations remain outstanding or as long as Bank remains obligated to make
advances, the undersigned shall furnish annually an updated financial statement
in a form satisfactory to Bank, which, when delivered shall be the property of
Bank.

      This Guaranty is made in and shall be construed in accordance with the
laws and judicial decisions of the State of Georgia. The undersigned agrees that
any dispute arising out of this Guaranty shall be adjudicated in either the
state or federal courts of Georgia and in no other forum. For that purpose, the
undersigned hereby submits to the jurisdiction of the state and/or federal
courts of Georgia. The undersigned waives any defense that venue is not proper
for any action brought in any federal or state court in the State of Georgia.

NOTICE. All notices, requests, demands, waivers, and other communications given
as provided in this Guaranty will be in writing, and unless otherwise
specifically provided in this Guaranty, will be deemed to have been given: (i)
if delivered in person, upon delivery, or (ii) if mailed by certified or
registered mail, postage prepaid, return receipt requested, and addressed to
either Guarantor or Bank at the addresses provided below on the second business
day after deposit in the United States Mail if addressed to an address located
within a State other than the State in which the notice is being mailed, or
(iii) if sent by overnight express delivery service, enclosed in a prepaid
envelope and addressed to Bank or Guarantor at the address provided below, on
the first business day after deposit with the service, or (iv) if sent by tested
telex, telegram, telecopy, facsimile, or other form of rapid transmission
confirmed by mailing (as provided in this section), at substantially the same
time as the rapid transmission. Either Guarantor or Bank may Change its
respective address as provided in this section by giving written notice of the
change as provided in this section. The addresses for notice are,

<Table>
<S>                   <C>                                             <C>                 <C>
Notice to Guarantor:  1569 Dempsey Road                               With a copy to:
                      -----------------------------------------                            -----------------------------------------
                      North Vancouver, British Columbia
                      -----------------------------------------                            -----------------------------------------

                      -----------------------------------------                            -----------------------------------------


Notice to Bank:       Branch Banking and Trust Company                With a copy to:
                      200 West Second Street                                               -----------------------------------------
                      Winston-Salem, North Carolina 27101
                                                                                           -----------------------------------------
</Table>

      Witness the signature and seal of each of the undersigned.

<Table>
<S>                                                           <C>
WITNESS                                                       INTERNATIONAL ABSORBENTS, INC.

/s/ David Thompson                                            By:    /s/ Gordon Ellis                                        (SEAL)
-----------------------------------------------------------          -----------------------------------------------------
                                                              Name:  Gordon L. Ellis
-----------------------------------------------------------          -----------------------------------------------------
                                                              Title: Chief Executive Officer
-----------------------------------------------------------          -----------------------------------------------------
                                   Address of Guarantor(s):          1569 Dempsey Road
                                                                     -----------------------------------------------------
                                                                     North Vancouver, British Columbia
                                                                     -----------------------------------------------------
</Table>

Signed, Sealed and delivered in the presence of:

<Table>
<S>                                                                  <C>
/s/ Mike Watson                                                      /s/ Karina Favro
-----------------------------------------------------------          ---------------------------------------------------------------
                      Unofficial Witness                                                      Notary Public
                                                                                             [NOTARIAL SEAL]

My Commission Expiration Date:
                               ----------------------------
</Table>


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