Document:

ex10_3.htm

    Exhibit
10.3

     

     

    SUBSIDIARY
GUARANTEE

     

    SUBSIDIARY
GUARANTEE, dated as of March 5, 2008 (this “Guarantee”), made by
each of the signatories hereto (together with any other entity that may become a
party hereto as provided herein, (the “Guarantors”), in
favor of the purchasers signatory (the "Purchaser") to that certain Debt
Restructuring Agreement, dated as of the date hereof, between Viral Genetics,
Inc., a Delaware corporation (the “ Company ”) and the
Purchaser.

     

    W
I T N E S S E T H:

     

    WHEREAS,
pursuant to that certain Debt Restructuring Agreement, dated as of the date
hereof, by and between the Company and the Purchaser (the “Restructuring
Agreement”), the Company and the Purchaser have agreed to restructure
certain debt obligated to the Purchaser by the Company, said Restructuring
Agreement including the Purchaser’s commitment to provide to the Company certain
revolving loan financing pursuant a Secured Revolving Credit Note, dated as of
the date hereof, and maturing June 30, 2013 (the “Revolving Credit”),
subject to the terms and conditions set forth in the Restructuring Agreement,
the obligations of the Revolving Credit being secured by a Security Agreement
(the “Security
Agreement”), also dated as of the date hereof; and

     

    WHEREAS,
each Guarantor will directly benefit from the extension of credit to the Company
represented by the issuance of the Revolving Credit; and

     

    NOW,
THEREFORE, in consideration of the premises and to induce the Purchaser to enter
into the Restructuring Agreement and to carry out the transactions contemplated
thereby, each Guarantor hereby agrees with the Purchaser as
follows:

     

    1.           
 Definitions. Unless
otherwise defined herein, terms defined in the Restructuring Agreement and used
herein shall have the meanings given to them in the Restructuring Agreement. The
words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import
when used in this Guarantee shall refer to this Guarantee as a whole and not to
any particular provision of this Guarantee, and Section and Schedule references
are to this Guarantee unless otherwise specified. The meanings given to terms
defined herein shall be equally applicable to both the singular and plural forms
of such terms. The following terms shall have the following
meanings:

     

    “Event of Default”
means the Events of Default set forth in Section 6 of the Security
Agreement.

     

    “Guarantee” means this
Subsidiary Guarantee, as the same may be amended, supplemented or otherwise
modified from time to time.

     

    “Obligations” means
the collective reference to all obligations and undertakings of the Company of
whatever nature, monetary or otherwise, under the Revolving Credit and the
Security Agreement, together with all reasonable attorneys’ fees, disbursements
and all other costs and expenses of collection incurred by Purchaser in
enforcing any of such obligations and/or this Guarantee.

     

    “Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.

     

    “Transaction
Documents” means this Guarantee, the Restructuring Agreement, and any
other documents or agreements executed in connection with the transactions
contemplated herein or therein.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.           
 Guarantee.

     

    (a)             Guarantee.

     

    (i)        The
Guarantors hereby, jointly and severally, unconditionally and irrevocably,
guarantee to the Purchaser and its respective successors, indorsees, transferees
and assigns, the prompt and complete payment and performance by the Company when
due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations.

     

    (ii)       Anything
herein or in any other Transaction Document to the contrary notwithstanding, the
maximum liability of each Guarantor hereunder and under the other Transaction
Documents shall in no event exceed the amount which can be guaranteed by such
Guarantor under applicable federal and state laws, including laws relating to
the insolvency of debtors, fraudulent conveyance or transfer or laws affecting
the rights of creditors generally (after giving effect to the right of
contribution established in Section 2(b)).

     

    (iii)      Each
Guarantor agrees that the Obligations may at any time and from time to time
exceed the amount of the liability of such Guarantor hereunder without impairing
the guarantee contained in this Section 2 or affecting the rights and remedies
of the Purchaser hereunder.

     

    (iv)     The
guarantee contained in this Section 2 shall remain in full force and effect
until all the Obligations and the obligations of each Guarantor under the
guarantee contained in this Section 2 shall have been satisfied by payment in
full.

     

    (v)       No
payment made by the Company, any of the Guarantors, any other guarantor or any
other Person or received or collected by the Purchaser from the Company, any of
the Guarantors, any other guarantor or any other Person by virtue of any action
or proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Obligations or any payment received or
collected from such Guarantor inrespect of the Obligations), remain liable for
the Obligations up to the maximum liability of such Guarantor hereunder until
the Obligations are paid in full.

     

    (vi)      Notwithstanding
anything to the contrary in this Agreement, with respect to any defaulted
non-monetary Obligations the specific performance of which by the Guarantors is
not reasonably possible (e.g. the issuance of the Company's Common Stock), the
Guarantors shall only be liable for making the Purchaser whole on a monetary
basis for the Company's failure to perform such Obligations in accordance with
the terms of the Revolving Credit.

     

    (b)             Right of
Contribution. Each Guarantor hereby agrees that to the extent that a
Guarantor shall have paid more than its proportionate share of any payment made
hereunder, such Guarantor shall be entitled to seek and receive contribution
from and against any other Guarantor hereunder which has not paid its
proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 2(c). The provisions of
this Section 2(b) shall in no respect limit the obligations and liabilities of
any Guarantor to the Purchaser, and each Guarantor shall remain liable to the
Purchaser for the full amount guaranteed by such Guarantor
hereunder.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c)             No Subrogation.
Notwithstanding any payment made by any Guarantor hereunder or any set-off or
application of funds of any Guarantor by the Purchaser, no Guarantor shall be
entitled to be subrogated to any of the rights of the Purchaser against the
Company or any other Guarantor or any collateral security or guarantee or right
of offset held by the Purchaser for the payment of the Obligations, nor shall
any Guarantor seek or be entitled to seek any contribution or reimbursement from
the Company or any other Guarantor in respect of payments made by such Guarantor
hereunder, until all amounts owing to the Purchaser by the Company on account of
the Obligations are paid in full. If any amount shall be paid to any Guarantor
on account of such subrogation rights at any time when all of the Obligations
shall not have been paid in full, such amount shall be held by such Guarantor in
trust for the Purchaser, segregated from other funds of such Guarantor, and
shall, forthwith upon receipt by such Guarantor, be turned over to the Purchaser
in the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Purchaser, if required), to be applied against the Obligations, whether
matured or unmatured, in such order as the Purchaser may determine.

     

    (d)             Amendments, Etc. With
Respect to the Obligations. Each Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against any Guarantor
and without notice to or further assent by any Guarantor, any demand for payment
of any of the Obligations made by the Purchaser may be rescinded by the
Purchaser and any of the Obligations continued, and the Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Purchaser, and
the Restructuring Agreement and the other Transaction Documents and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Purchaser may
deem advisable from time to time, and any collateral security, guarantee or
right of offset at any time held by the Purchaser for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. The
Purchaser shall have no obligation to protect, secure, perfect or insure any
Lien at any time held by them as security for the Obligations or for the
guarantee contained in this Section 2 or any property subject
thereto.

     

    (e)             Guarantee Absolute and
Unconditional. Each Guarantor waives any and all notice of the creation,
renewal, extension or accrual of any of the Obligations and notice of or proof
of reliance by the Purchaser upon the guarantee contained in this Section 2 or
acceptance of the guarantee contained in this Section 2; the Obligations, and
any of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 2; and all dealings between the Company and
any of the Guarantors, on the one hand, and the Purchaser, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. Each Guarantor waives
to the extent permitted by law diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Company or any of the
Guarantors with respect to the Obligations. Each Guarantor understands and
agrees that the guarantee contained in this Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to
(a) any of the Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Purchaser, (b) any defense, set-off or counterclaim (other than
a defense
of payment or performance or fraud or misconduct by Purchaser) which may at any
time be available to or be asserted by the Company or any other Person against
the Purchaser, or (c) any other circumstance whatsoever (with or without notice
to or knowledge of the Company or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Company for the
Obligations, or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, the
Purchaser may, but shall be under no obligation to, make a similar demand on or
otherwise pursue such rights and remedies as they may have against the Company,
any other Guarantor or any other Person or against any collateral security or
guarantee for the Obligations or any right of offset with respect thereto, and
any failure by the Purchaser to make any such demand, to pursue such other
rights or remedies or to collect any payments from the Company, any other
Guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Company, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Purchaser against any Guarantor. For the purposes hereof, "demand" shall include
the commencement and continuance of any legal proceedings.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (f)             Reinstatement. The
guarantee contained in this Section 2 shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Purchaser upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Company or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Company or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been
made.

     

    (g)             Payments. Each
Guarantor hereby guarantees that payments hereunder will be paid to the
Purchaser without set-off or counterclaim in U.S. dollars at the address set
forth or referred to in the Restructuring Agreement.

     

    3.            
Representations and
Warranties. Each Guarantor hereby makes the following representations and
warranties to Purchaser as of the date hereof:

     

    (a)             Organization and
Qualification. The Guarantor is a corporation, duly incorporated, validly
existing and in good standing under the laws of the applicable jurisdiction set
forth on Schedule 1, with the requisite corporate power and authority to own and
use its properties and assets and to carry on its business as currently
conducted. The Guarantor has no subsidiaries other than those identified as such
on the disclosure schedules to the Restructuring Agreement and the Security
Agreement. The Guarantor is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not, individually or in the aggregate, (x) adversely
affect the legality, validity or enforceability of any of this Guaranty in any
material respect, (y) have a material adverse effect on the results of
operations, assets, prospects, or financial condition of the Guarantor or (z)
adversely impair in any material respect the Guarantor's ability to perform
fully on a timely basis its obligations under this Guaranty (a “ Material
Adverse Effect ”).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)             Authorization;
Enforcement. The Guarantor has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Guaranty, and otherwise to carry out its obligations hereunder. The execution
and delivery of this Guaranty by the Guarantor and the consummation by it of the
transactions contemplated hereby have been duly authorized by all requisite
corporate action on the part of the Guarantor. This Guaranty has been duly
executed and delivered by the Guarantor and constitutes the valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, creditors' rights and
remedies or by other equitable principles of general application.

     

    (c)             No Conflicts. The
execution, delivery and performance of this Guaranty by the Guarantor and the
consummation by the Guarantor of the transactions contemplated thereby do not
and will not (i) conflict with or violate any provision of its Certificate of
Incorporation or By-laws or (ii) conflict with, constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Guarantor
is a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Guarantor is subject (including Federal and state
securities laws and regulations), or by which any material property or asset of
the Guarantor is bound or affected, except in the case of each of clauses (ii)
and (iii), such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as could not, individually or in the aggregate,
have or result in a Material Adverse Effect. The business of the Guarantor is
not being conducted in violation of any law, ordinance or regulation of any
governmental authority, except for violations which, individually or in the
aggregate, do not have a Material Adverse Effect.

     

    (d)             Consents and
Approvals. The Guarantor is not required to obtain any consent, waiver,
authorization or order of, or make any filing or registration with, any court or
other federal, state, local, foreign or other governmental authority or other
person in connection with the execution, delivery and performance by the
Guarantor of this Guaranty.

     

    (e)             Restructuring
Agreement. The representations and warranties of the Company set forth in
the Restructuring Agreement as they relate to such Guarantor, each of which is
hereby incorporated herein by reference, are true and correct as of each time
such representations are deemed to be made pursuant to such Restructuring
Agreement, and the Purchaser shall be entitled to rely on each of them as if
they were fully set forth herein, provided, that each reference in each such
representation and warranty to the Company's knowledge shall, for the purposes
of this Section 3, be deemed to be a reference to such Guarantor's
knowledge.

     

    4.             Covenants.

     

    (a)             Each
Guarantor covenants and agrees with the Purchaser that, from and after the date
of this Guarantee until the Obligations shall have been paid in full, such
Guarantor shall take, and/or shall refrain from taking, as the case may be, each
commercially reasonable action that is necessary to be taken or not taken, as
the case may be, so that no Event of Default is caused by the failure to take
such action or to refrain from taking such action by such
Guarantor.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)             So
long as any of the Obligations are outstanding, each Guarantor will not directly
or indirectly on or after the date of this Guarantee:

     

    i.         except
with the prior written consent of the Purchaser or except for any liability or
obligation that is secured by a Permitted Lien (as defined in the Security
Agreement), enter into, create, incur, assume or suffer to exist any
indebtedness for borrowed money of any kind, including but not limited to, a
guarantee, on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom
that is senior to, or pari passu with, in any respect, such Guarantor’s
obligations hereunder;

     

    ii.        except
for Permitted Liens, enter into, create, incur, assume or suffer to exist any
liens of any kind, on or with respect to any of its property or assets now owned
or hereafter acquired or any interest therein or any income or profits therefrom
that is senior to, in any respect, such Guarantor’s obligations
hereunder;

     

    iii.       amend
its certificate of incorporation, bylaws or other charter documents so as to
adversely affect any rights of the Holder hereunder;

     

    iv.       repay,
repurchase or offer to repay, repurchase or otherwise acquire more than a de
minimis number of shares of its Common Stock or Common Stock
Equivalents;

     

    v.       
enter into any agreement with respect to any of the foregoing; or

     

    vi.       pay
cash dividends on any equity securities of the Company.

     

    5.             Miscellaneous.

     

    (a)             Amendments
in Writing. None of the terms or provisions of this Guarantee may be waived,
amended, supplemented or otherwise modified except in writing by the
Purchaser.

     

    (b)             Notices.
All notices, requests and demands to or upon the Purchaser or any Guarantor
hereunder shall be effected in the manner provided for in the Restructuring
Agreement; provided that any such notice, request or demand to or upon any
Guarantor shall be addressed to such Guarantor at its notice address set forth
on Schedule 5(b) .

     

    (c)             No
Waiver By Course Of Conduct; Cumulative Remedies. The Purchaser shall not by any
act (except by a written instrument pursuant to Section 5(a)), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any default under the Transaction Documents
or Event of Default. No failure to exercise, nor any delay in exercising, on the
part of the Purchaser, any right, power or privilege hereunder shall operate as
a waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Purchaser of any right
or remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Purchaser would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any other rights or remedies provided
by law.

     

    (d)             Enforcement
Expenses; Indemnification.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (i)        Each
Guarantor agrees to pay, or reimburse the Purchaser for, all its costs
and
expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Guarantee, including, without limitation, the reasonable fees and
disbursements of counsel to the Purchaser.

     

    (ii)       Each
Guarantor agrees to pay, and to save the Purchaser harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which may be payable or determined to be
payable in connection with any of the transactions contemplated by this
Guarantee.

     

    (iii)      Each
Guarantor agrees to pay, and to save the Purchaser harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Guarantee to the extent the Company would be required to do so pursuant to the
Restructuring Agreement.

     

    (iv)     The
agreements in this Section shall survive repayment of the
Obligations.

     

    (e)             Successor and
Assigns. This Guarantee shall be binding upon the successors and assigns
of each Guarantor and shall inure to the benefit of the Purchaser and their
respective successors and assigns; provided that no Guarantor may assign,
transfer or delegate any of its rights or obligations under this Guarantee
without the prior written consent of the Purchaser.

     

    (f)             Set-Off. Each
Guarantor hereby irrevocably authorizes the Purchaser at any time and from time
to time while an Event of Default under any of the Transaction Documents shall
have occurred and be continuing, without notice to such Guarantor or any other
Guarantor, any such notice being expressly waived by each Guarantor, to set-off
and appropriate and apply any and all deposits, credits, indebtedness or claims,
in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the Purchaser to
or for the credit or the account of such Guarantor, or any part thereof in such
amounts as the Purchaser may elect, against and on account of the obligations
and liabilities of such Guarantor to the Purchaser hereunder and claims of every
nature and description of the Purchaser against such Guarantor, in any currency,
whether arising hereunder, under the Restructuring Agreement, any other
Transaction Document or otherwise, as the Purchaser may elect, whether or not
the Purchaser have made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The Purchaser shall
notify such Guarantor promptly of any such set-off and the application made by
the Purchaser of the proceeds thereof, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of the Purchaser under this Section are in addition to other rights and
remedies(including, without limitation, other rights of set-off) which the
Purchaser may have.

     

    (g)             Counterparts. This
Guarantee may be executed by one or more of the parties to this Guarantee on any
number of separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (h)             Severability. Any
provision of this Guarantee 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.

     

    (i)             Section Headings. The
Section headings used in this Guarantee are for convenience of reference only
and are not to affect the construction hereof or be taken into consideration in
the interpretation hereof.

     

    (j)             Integration. This
Guarantee and the other Transaction Documents represent the agreement of the
Guarantors and the Purchaser with respect to the subject matter hereof and
thereof, and there are no promises, undertakings, representations or warranties
by the Purchaser relative to subject matter hereof and thereof not expressly set
forth or referred to herein or in the other Transaction Documents.

     

    (k)             Governing Law. THIS
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF CALIFORNIA WITHOUT REGARD TO ANY PRINCIPLES OF
CONFLICTS OF LAWS.

     

    (l)             Submission to
Jurisdictional; Waiver. Each Guarantor hereby irrevocably and
unconditionally:

     

    (i)           submits
for itself and its property in any legal action or proceeding relating to this
Guarantee and the other Transaction Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of California,
located in Los Angeles County, California, the courts of the United States of
America for the Southern District of California, and appellate courts from any
thereof;

     

    (ii)           consents
that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;

     

    (iii)           agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such Guarantor at its address
referred to in the Restructuring Agreement or at such other address of which the
Purchaser shall have been notified pursuant thereto;

     

    (iv)           agrees
that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other
jurisdiction; and

     

    (v)           waives,
to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.

    
       

      (m)         Acknowledgements.
Each Guarantor hereby acknowledges that:

    

     

    (i)           it
has been advised by counsel in the negotiation, execution and delivery of this
Guarantee and the other Transaction Documents to which it is a
party;

     

    (ii)           the
Purchaser has no fiduciary relationship with or duty to any Guarantor arising
out of or in connection with this Guarantee or any of the other Transaction
Documents, and the relationship between the Guarantors, on the one hand, and the
Purchaser, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor; and

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (iii)           no
joint venture is created hereby or by the other Transaction Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Guarantors and the Purchaser.

     

    (n)             Additional
Guarantors. The Company shall cause each of its United States
subsidiaries formed or acquired on or subsequent to the date hereof to become a
Guarantor for all purposes of this Guarantee by executing and delivering an
Assumption Agreement in the form of Annex 1 hereto.

     

    (o)             Release of
Guarantors. Subject to Section 2.6, each Guarantor will be released from
all liability hereunder concurrently with the repayment in full of all amounts
owed under the Restructuring Agreement, the Revolving Credit and the other
Transaction Documents.

     

    (p)             Seniority. The
Obligations of each of the Guarantors hereunder rank senior in priority to any
other unsecured Debt (as defined in the Revolving Credit) of such
Guarantor.

     

    (q)             Waiver of Jury Trial.
EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE PURCHASER, HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM
THEREIN.

     

    IN
WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly
executed and delivered as of the date first above written.

     

    
      

      
        	
                VIRAL
      GENETICS, INC., a California Corporation

              
	 
	 
	By:	
                 

              
	 	 
      Name: Haig Keledjian
	 	 
      Title: President

      

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
1

     

     

    GUARANTORS

     

     

    The
following are the names, notice addresses and jurisdiction of organization of
each Guarantor.

     

    
      	 
      	
              JURISDICTION
      OF

               INCORPORATION

            	 
      	
              COMPANY

               OWNED
      BY

               PERCENTAGE

            
	 
      	
              California

            	 
      	
              100%

            
	
              Viral
      Genetics, Inc.

               1321
      Mountain View Circle

               Azusa,
      CA 91702

            	 
      	 
      	 
      

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Annex
1 to

     SUBSIDIARY
GUARANTEE

     

     

    ASSUMPTION
AGREEMENT, dated as of ___________________, 200____ made by
________________________, a __________ corporation (the “ Additional Guarantor
”), in favor of the Purchaser pursuant to the Debt Restructuring Agreement
referred to below. All capitalized terms not defined herein shall have the
meaning ascribed to them in such Debt Restructuring Agreement.

     

     

    W
I T N E S S E T H :

     

     

    WHEREAS,
Viral Genetics, Inc., a Delaware corporation (the “Company”) and the
Purchaser have entered into a Debt Restructuring Agreement, dated as of March 5,
2008 (as amended, supplemented or otherwise modified from time to time, the
“ Debt Restructuring
Agreement ”);

     

     

    WHEREAS,
in connection with the Debt Restructuring Agreement, the Company and its
Subsidiaries (other than the Additional Guarantor) have entered into the
Subsidiary Guarantee, dated as of March 5, 2008 (as amended, supplemented or
otherwise modified from time to time, the “ Guarantee ”) in
favor of the Purchaser;

     

     

    WHEREAS,
the Debt Restructuring Agreement requires the Additional Guarantor to become a
party to the Guarantee; and

     

     

    WHEREAS,
the Additional Guarantor has agreed to execute and deliver this Assumption
Agreement in order to become a party to the Guarantee;

     

     

    NOW,
THEREFORE, IT IS AGREED:

     

     

    1.  
 Guarantee. By
executing and delivering this Assumption Agreement, the Additional Guarantor, as
provided in Section 5(n) of the Guarantee, hereby becomes a party to the
Guarantee as a Guarantor thereunder with the same force and effect as if
originally named therein as a Guarantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Guarantor thereunder. The information set forth in Annex 1-A hereto is hereby
added to the information set forth in Schedule 1 to the Guarantee. The
Additional Guarantor hereby represents and warrants that each of the
representations and warranties contained in Section 3 of the Guarantee is true
and correct on and as the date hereof as to such Additional Guarantor (after
giving effect to this Assumption Agreement) as if made on and as of such
date.

     

     

    2.  
 Governing
Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly
executed and delivered as of the date first above written.

     

    

    
      
        	 	[ADDITIONALGUARANTOR]	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:ex10_1.htm

    INVESTOR RELATIONS
AGREEMENT

     

     

    THIS
INVESTOR RELATIONS AGREEMENT is made effective as of the 15TH  day
of June, 2008.

     

    BETWEEN:

     

    IVANY MINING INC., with an
address at 8720-A
Rue Dufrost, Montreal, QC, H1P 2Z5

     

    (the
Company)

     

    AND:

     

    FOCUS RELATIONS INC., with an
address at Suite 73, 2080 Leanne Boulevard, Mississauga, Ontario
L5K2S6

     

    (the
Contractor)

     

    WHEREAS:

     

    A.                          The
Company is engaged in, among other things, the business of the acquisition and
exploration of mining properties;

     

    B.                          The
Company is a reporting issuer in the USA and its common shares are listed for
trading on the OTCBB;

     

    C.                          The
Company desires to retain the Contractor to assist with the corporate and
investor relations of the Company and the Contractor has agreed to assist with
the corporate relations of the Company pursuant to the terms of this
Agreement.

     

                                  NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants
and promises set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged by each, the parties
hereto agree as follows:

     

     

    ARTICLE
1

    APPOINTMENT
AND AUTHORITY OF CONTRACTOR

     

    1.1                         
Appointment of
Contractor

     

                                  The
Company hereby appoints the Contractor to perform certain services for the
benefit of the Company as hereinafter set forth, and the Company hereby
authorizes the Contractor to exercise such powers as provided under this
Agreement. The Contractor accepts such appointment on the terms and conditions
herein set forth

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.2                         
Authority of
Contractor

     

                                  The
Contractor shall have no right or authority, express or implied, to commit or
otherwise obligate the Company in any manner whatsoever except to the extent
specifically provided herein or specifically authorized in writing by the
Company.

     

    1.3                         
Independent
Contractor

     

                                  In
performing its services hereunder, the Contractor shall be an independent
contractor and not an employee or agent of the Company, except that the
Contractor shall be the agent of the Company solely in circumstances where the
Contractor must be the agent to carry out its obligations as set forth in this
Agreement. Nothing in this Agreement shall be deemed to require the Contractor
to provide its services exclusively to the Company and the Contractor hereby
acknowledges that the Company is not required and shall not be required to make
any remittances and payments required of employers by statute on the
Contractor's behalf and the Contractor or any of its agents or employees shall
not be entitled to the fringe benefits provided by the Company to its
employees.

     

    1.4                         
Contractors
Warranties

     

                                  The
Contractor represents and warrants that it will provide, as required and at its
own expense, competent management personnel and that its agents or employees
have the qualifications, experience and capabilities necessary to carry out the
services to be performed hereunder, and that the services will be performed to
the standard of care, skill and diligence of experienced workers in that same
field.

     

     

    ARTICLE
2

    CONTRACTOR'S
AGREEMENTS

     

    2.1                         
General

     

                                  The
Contractor, at the expense of and on behalf of the Company, shall:

     

    
      	 
      	
              (a)

            	
              assist
      with the corporate and investor relations of the Company pursuant to the
      terms and conditions of this Agreement;

            
	 
      	 
      	 
      
	 
      	
              (b)

            	
              implement
      or cause to be implemented decisions of the Company in accordance with and
      as limited by this Agreement;

            
	 
      	 
      	 
      
	 
      	
              (c)

            	
              at
      all times be subject to the direction of the Company and shall keep the
      Company informed as to all matters concerning the Contractor's activities;
      and

            
	 
      	 
      	 
      
	 
      	
              (d)

            	
              meet
      the performance standards that may be reasonably prescribed by the Company
      from time to time. The Company acknowledges that, since the Contractor is
      an independent contractor and not an employee of the Company, the
      Contractor shall have direction and control, of the manner, methods,
      techniques and procedures used by its agents or employees to perform the
      services described herein.

            

    

     

    2.2                          Contractor's
Activities

     

                                  In
carrying out its obligations under this Agreement with respect to the
promotional activities of the Company, the Contractor shall:

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	 
      	
              (a)

            	
              introduce
      to the Company brokerage firms; the money managers and research
      departments of certain funds and institutions; analysts; special situation
      people or special situation investing groups; and other persons or
      entities who may have a direct interest in the Company’s stock
      (collectively, the Investing Groups). Further, the Contractor shall
      initiate and maintain communication with the Investing Groups through a
      series of meetings in selected cities, by written correspondence, personal
      visits, individual telephone conversations and
      teleconferencing;

            
	 
      	 
      	 
      
	 
      	
              (b)

            	
              create,
      carry out and provide a publicity program to the Company using any or all
      of the following means: (i) financial newspapers, magazines and
      periodicals; (ii) news, feature and financial sections of the national
      news magazines; (iii) wire services and feature syndicates; (iv)
      financial, news and feature sections of daily newspapers; (v) financial
      television and radio programs (vi) trade periodicals that circulate
      throughout the Company’s industry; (vii) press releases; and (viii) press
      presentations and special press interviews (collectively, the Corporate
      Communications Program);

            
	 
      	 
      	 
      
	 
      	
              (c)

            	
              the
      Corporate Communications Program provided to the Company shall consist of
      information, provided by the Company to the Contractor. Further, the
      Corporate Communications Program will relate to the Company’s general
      corporate activity; personnel and executives including management and
      management philosophy; corporate history and future goals; potential sales
      and earnings; expansion programs; ore findings and reports; and other
      salient subjects that will enhance the Company’s corporate
      image;

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              (d)

            	
              in
      addition to the services provided herein, the Contractor may provide to
      the Company certain corporate finance advisory services. Through the firms
      relationship with the investment banking community, the Contractor is able
      to introduce the Company to potential sources of financing, such as,
      investment bankers, brokerage firms, venture capital groups, and
      individuals or special group investors. If the Contractor provides such
      services to the Company and monies are raised for the Company, then the
      Company agrees to pay to the Contractor a finder’s fee. The amount of such
      finder’s fee shall be based on a mutually agreed upon percentage of such
      monies raised;

            

    

     

    provided
that it is acknowledged that the Company may engage other entities to assist
with the corporate and investor relations of the Company and in this regard the
Contractor will take such steps as shall be necessary to co-ordinate its
activities with such other entities to ensure there is no duplication of
services.

     

    2.3                         
Fiduciary
Obligations

     

                                  Without
limiting the generality of the foregoing, the Contractor will not during the
term of this Agreement act in any manner contrary to the terms of this
Agreement, or the best interests of the Company.

     

    2.4                          Dissemination of
Information

     

                                  The
Contractor will not disseminate or spread any false or misleading information
regarding the Company to any person. The Contractor will disseminate any news
and information which

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    is
specifically authorized in writing by the Company. No act or omission by the
Company will act to waive the requirements of this Section 2.4.

     

    ARTICLE
3

    COMPANY'S
AGREEMENTS

     

    3.1                         
Compensation of
Contractor

     

                                  As
compensation for the services rendered by the Contractor pursuant to this
Agreement, the Company shall pay to the Contractor a total of 300,000 common
shares of Ivany Mining Inc. (IVNM), 180,000 common shares shall be paid at
signing of this agreement, and 10,000 common shares shall be issued
in  advance, on or before the first day of each month or if a
Saturday, Sunday or holiday the next following business day, for the term of
this agreement.

     

    3.2                         
Access to Company
Information

     

                                  The
Company will make available to the Contractor such information and data and will
permit the Contractor, its agents and employees, to have access to such
documents or premises as are reasonably necessary to enable it to perform the
services provided for under this Agreement.

     

    3.3                          Indemnity by
Company

     

                    
             The
Company hereby agrees to indemnify, defend and hold harmless the Contractor,
from and against any and all claims, demands, losses, actions, lawsuits and
other proceedings, judgments and awards, and costs and expenses (including
reasonable legal fees), arising directly or indirectly, in whole or in part, out
of any matter related to any action taken by the Contractor within the scope of
its duties or authority hereunder, excluding only such of the foregoing as arise
from the fraudulent, gross negligence, reckless or wilful act or omission of the
Contractor, its officers, directors, agents or employees or as arise in respect
of the Contractor's office overhead or the Contractor's general

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    administrative
expenses, and the provisions of this Section 3.3 shall survive termination of
this Agreement.

     

    ARTICLE
4

    DURATION,
TERMINATION AND DEFAULT

     

    4.1                         
SEC Approval and
Effective Date

     

                                  This
Agreement is conditional and subject to the approval of the SEC rules and
limitations, and if approved, this Agreement shall become effective as of the
15th day of June, 2008, and shall remain in force for a term of 12 months,
subject to termination as provided herein. The Contractor will assist the
Company with providing such information as the SEC may require in considering
this Agreement.

     

    4.2                         
Termination

     

                                  This
Agreement may be terminated by either party on December 31, 2008 (or the next
business day) by giving the other party written notice of such termination, and
such termination shall be effective immediately.

     

    4.3                         
Duties Upon
Termination

     

                                  Upon
termination of this Agreement for any reason, the Contractor shall, upon receipt
of all sums due and owing, promptly deliver the following in accordance with the
directions of the Company:

     

    
      	 
      	
              (a)

            	
              a
      final accounting, reflecting the balance of expenses incurred on behalf of
      the Company as of the date of termination; and

            
	 
      	 
      	 
      
	 
      	
              (b)

            	
              all
      documents pertaining to the Company or this Agreement, including but not
      limited to, all books of account, correspondence and contracts, provided
      that the Contractor shall be entitled thereafter to inspect, examine and
      copy all of the documents which it delivers in accordance with this
      provision at all reasonable times upon three (3) days' notice to the
      Company.

            

    

     

    4.4                          Compensation of Contractor
on Termination

     

                                  Upon
termination of this Agreement, the Contractor shall be entitled to receive as
its full and sole compensation in discharge of obligations of the Company to the
Contractor under this Agreement (except as otherwise provided in Section 3.4),
all sums due and payable under this Agreement to the date of termination and the
Contractor shall have no right to receive any further payments; provided,
however, that the Company shall have the right to offset against any payment
owing to the Contractor under this Agreement any damages, liabilities, costs or
expenses suffered by the Company by reason of the fraud, negligence or wilful
act of the Contractor, to the extent such right has not been waived by the
Company.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    ARTICLE
5

    CONFIDENTIALITY

     

     

    5.1                          Ownership of Work
Product

     

                                  All
reports, documents, concepts, products and processes together with any marketing
schemes, business or sales contracts, or any business opportunities prepared,
produced, developed, or acquired, by or at the direction of the Contractor,
directly or indirectly, in connection with or otherwise developed or first
reduced to practice by the Contractor performing the services (collectively, the
"Work Product") shall belong exclusively to the Company which shall be entitled
to all right, interest, profits or benefits in respect thereof. No copies,
summaries or other reproductions of any Work Product shall be made by the
Contractor or any of its agents or employees without the express permission of
the Company, provided that the Contractor is hereby given permission to maintain
one copy of the Work Product for its own use.

     

    5.2                          Confidentiality

     

                                  The
Contractor shall not, except as authorized or required by its duties, reveal or
divulge to any person or companies any of the trade secrets, secret or
confidential operations, processes or dealings or any information concerning the
organization, business, finances, transactions or other affairs of the Company,
which may come to its knowledge during the term of this Agreement and shall keep
in complete secrecy all confidential information entrusted to him and shall not
use or attempt to use any such information in any manner which may injure or
cause loss, either directly or indirectly, to the Company's business or may be
likely so to do. This restriction shall continue to apply after the termination
of this Agreement without limit in point of time but shall cease to apply to
information or knowledge which may come into the public domain.

     

                                  The
Contractor shall comply, and shall cause its agents and employees to comply,
with such directions as the Company shall make to ensure the safeguarding or
confidentiality of all such information. The Company may require that any agent
or employee of the Contractor execute an agreement with the Company regarding
the confidentiality of all such information.

     

    5.3                         
Devotion to
Contract

     

                                  During
the term of this Agreement, the Contractor shall devote sufficient time,
attention, and ability to the business of the Company, and to any associated
company, as is reasonably necessary for the proper performance of its services
pursuant to this Agreement. Nothing contained herein shall be deemed to require
the Contractor to devote its exclusive time, attention and ability to the
business of the Company. During the term of this Agreement, the Contractor
shall, and shall cause each of its agents or employees assigned to performance
of the services on behalf of the Contractor to,:

     

    
      	 
      	
              (a)

            	
              at
      all times perform its services faithfully, diligently, to the best of its
      abilities and in the best interests of the Company;

            
	 
      	 
      	 
      
	 
      	
              (b)

            	
              devote
      such of its time, labour and attention to the business of the Company as
      is necessary for the proper performance of the Contractor's services
      hereunder; and

            
	 
      	 
      	 
      
	 
      	
              (c)

            	
              refrain
      from acting in any manner contrary to the best interests of the Company or
      contrary to the duties of the Contractor as contemplated
      herein.

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    5.4                          Other
Activities

     

                                  The
Contractor shall not be precluded from acting in a function similar to that
contemplated under this Agreement or in any other capacity for any other person,
firm or company provided such action shall not conflict with the Contractor's
duty to the Company and shall not prevent the Contractor from fulfilling its
duties pursuant to this Agreement.

     

    5.5                          Trading/Tipping

     

                                  The
Contractor will not disclose to any party information respecting the Company
that has not been publicly disclosed, nor will the Contractor trade in shares of
the Company while in possession of such knowledge.

     

    ARTICLE
6

    MISCELLANEOUS

     

    6.1                          Waiver;
Consents

     

                                  No
consent, approval or waiver, express or implied, by either party hereto, to or
of any breach of default by the other party in the performance by the other
party of its obligations hereunder shall be deemed or construed to be a consent
or waiver to or of any other breach or default in the performance by such other
party of the same or any other obligations of such other party or to declare the
other party in default, irrespective of how long such failure continues, shall
not constitute a general waiver by such party of its rights under this
Agreement, and the granting of any consent or approval in any one instance by or
on behalf of the Company shall not be construed to waiver or limit the need for
such consent in any other or subsequent instance.

     

    6.2                         
Governing
Law

     

                                  This
Agreement and all matters arising there under shall be governed by the laws of
the State of Deleware.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    6.3                          Successors,
etc.

     

                                  This
Agreement shall enure to the benefit of and be binding upon each of the parties
hereto and their respective heirs, successors and permitted
assigns.

     

    6.4                         
Subcontracts

     

                                  The
Contractor has the right, power, and authority to delegate any duties or
obligations arising hereunder, with the approval of the Company, or to
subcontract its services, or any portion thereof, with the approval of the
Company, provided that any subcontract shall be made subject to the terms of
this Agreement and the Contractor shall require the subcontractor, to
acknowledge such terms in writing at the time the subcontract agreement is
executed. No such delegation or subcontracting shall relieve the Contractor from
any of its obligations under this Agreement and a subcontractor shall, as
between the Company and the Contractor, be deemed to be the agent of the
Contractor.

     

    6.5                          Assignment

     

                                  This
Agreement may not be assigned by any party except with the written consent of
the other party hereto.

     

    6.6                         
Entire Agreement and
Modification

     

                                  This
Agreement constitutes the entire agreement between the parties hereto and
supersedes all prior agreements and undertakings, whether oral or written,
relative to the subject matter hereof. To be effective any modification of this
Agreement must be in writing and signed by the party to be charged
thereby.

     

    6.7                         
Headings

     

                                  The
headings of the Sections and Articles of this Agreement are inserted for
convenience of reference only and shall not in any manner affect the
construction or meaning of anything herein contained or govern the rights or
liabilities of the parties hereto.

     

    6.8                         
Notices

     

                                  All
notices, requests and communications required or permitted hereunder shall be in
writing and shall be sufficiently given and deemed to have been received upon
personal delivery or, if mailed, upon the first to occur of actual receipt or
forty-eight (48) hours after being placed in the mail, postage prepaid,
registered or certified mail, return receipt requested, respectively addressed
to the Company or the Contractor as follows:

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    The
Company:

     

    8720-A
Rue Dufrost

    Montreal,
Quebec

    H1P-2Z5

     

    Attention:
Mr. Ivany or Mr. Cantore

     

           The
Contractor:

     

    Suite 73
- 2080 Leanne Blvd.

    Mississauga,
Ontario

    L5K-2S6

     

    Attention:
Vanessa Lourenco

     

    or such
other address as may be specified in writing to the other party, but notice of a
change of address shall be effective only upon the actual receipt.

     

    6.9                         
Time of the
Essence

     

                                 
Time is of the essence.

     

    6.10                       
Further
Assurances

     

                                  The
parties hereto agree from time to time after the execution hereof to make, do,
execute or cause or permit to be made, done or executed all such further and
other lawful acts, deeds, things, devices and assurances in law whatsoever as
may be required to carry out the true intention and to give full force and
effect to this Agreement.

     

    6.11                        Counterparts

     

                                  This
Agreement may be executed in several counter-parts, each of which will be deemed
to be an original and all of which will together constitute one and the same
instrument.

     

                                  IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and
year first above written.

     

    IVANY
MINING INC.

     

    Per:      /s/Derek Ivany

                Authorized
Signatory       

     

    FOCUS
RELATIONS INC.

     

    Per:    
/s/Vanessa Lourenco

               
Authorized Signatory

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