SUBSIDIARY GUARANTY
Exhibit
10.5
SUBSIDIARY
GUARANTY, dated as of June 30, 2008, made by NexMed (U.S.A), Inc., a Delaware
corporation (the “Guarantor”),
in
favor of each of the Holders (as defined below).
W
I T N E S S E T H:
Whereas,
pursuant
to that certain Purchase Agreement (the “Purchase
Agreement”)
dated
on or about the date hereof by and among NexMed, Inc., a Nevada corporation
(the
“Company”),
and
the Purchasers named therein (the “Purchasers”),
the
Company issued to the Purchasers the Company’s 7% Convertible Notes Due December
31, 2011 (the “Notes”);
and
Whereas,
the
Guarantor is a wholly-owned subsidiary of the Company; and
Whereas,
as a
condition precedent to the Purchasers’ purchase of the Notes and in order to
induce the Purchasers to purchase the Notes and make the loans evidenced by
the
Notes, the Company agreed that the Guarantor would guaranty the obligations
under the Notes in accordance with the terms set forth in this Guaranty, the
Notes, the Mortgage (as defined herein) and the Purchase Agreement.
NOW,
THEREFORE,
in
consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and
to induce the Holders to make and maintain the loans evidenced by the Notes,
Guarantor hereby agrees with the Holders as follows:
SECTION
1. DEFINED
TERMS
1.1 Definitions
(a) Capitalized
terms used herein and not otherwise defined herein shall have the meanings
given
to them in the Notes or Purchase Agreement.
(b) The
following terms shall have the following meanings:
“Guaranty”
means
this Subsidiary Guaranty, as the same may be amended, supplemented or otherwise
modified from time to time.
“Holders”
mean
all of the Holders (as identified in each Note) of the Notes.
“Mortgage”
means
the Mortgage, Security Agreement and Assignment of Leases and Rents executed
by
the Guarantor in favor of the Purchasers on or about the date hereof, securing
the Company’s Obligations under the Notes and the Guarantor’s obligations
hereunder.
“Obligations”
mean
the collective reference to the unpaid principal of and default interest on
the
Notes and Accreted Amounts thereunder and all other obligations and liabilities
of the Company to the Holders (including, without limitation, default interest
accruing at the then applicable rate provided in the Notes after the maturity
of
the Notes and interest accruing at the then applicable rate after the filing
of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Company, if a claim for
post-filing or post-petition interest is allowed in such proceeding, and
including, without limitation, the conversion of Notes into Common Stock),
whether direct or indirect, absolute or contingent, due or to become due, or
now
existing or hereafter incurred, which may arise under, out of, or in connection
with, the Purchase Agreement, the Notes, this Guaranty, the Mortgage or the
other Agreements, or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
reasonable fees and disbursements of counsel to the Holders that are required
to
be paid by the Company or the Guarantor pursuant to the terms of any of the
foregoing agreements).
“Person”
shall
mean and include an individual, a partnership, a corporation (including a
business trust), a joint stock company, a limited liability company, an
unincorporated association, a joint venture or other entity or a governmental
authority.
1.2 Other
Definitional Provisions. The
words
“hereof,” “herein”, “hereto” and “hereunder” and words of similar import when
used in this Guaranty shall refer to this Guaranty as a whole and not to any
particular provision of this Guaranty, and Section references are to this
Guaranty unless otherwise specified. The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such
terms.
SECTION
2. GUARANTY
2.1 Guaranty.
The
Guarantor hereby absolutely, unconditionally and irrevocably guarantees to
the
Holders and their 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.
2.2 Nature
of Guaranty.
Guarantor’s liability under this Guaranty shall be unlimited, open and
continuous for so long as this Guaranty remains in force. Guarantor intends
to
guaranty at all times the performance and prompt payment when due, whether
at
maturity or earlier by reason of acceleration or otherwise, of all Obligations.
Accordingly, no payments made upon the Obligations will discharge or diminish
the continuing liability of Guarantor in connection with any remaining portions
of the Obligations or any of the Obligations which subsequently arises or is
thereafter incurred or contracted. No payment made by the Company, the
Guarantor, any other guarantor or any other Person or received or collected
by
the Holders from the Company, the Guarantor, 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 Guarantor hereunder which shall, notwithstanding any such
payment (other than payment and performance in full of the Obligations), remain
liable for the Obligations until the Obligations are paid and performed in
full.
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2.3 Duration
of Guaranty.
This
Guaranty will take effect when received by the Holders without the necessity
of
any acceptance by the Holders, or any notice to Guarantor or to the Company,
and
will continue in full force until all the Obligations incurred or contracted
shall have been fully and finally paid and satisfied and all other obligations
of Guarantor under this Guaranty shall have been performed in full. All
renewals, extensions, substitutions, and modifications of the Obligations,
release of any other guarantor or termination of any other guaranty, of the
Obligations shall not affect the liability of Guarantor under this Guaranty.
This Guaranty is irrevocable and is binding upon Guarantor and Guarantor’s
successors and assigns so long as any of the guaranteed Obligations remain
unpaid.
2.4 No
Subrogation.
Notwithstanding any payment made by the Guarantor hereunder or any set-off
or
application of funds of the Guarantor by the Holders, the Guarantor shall not
be
entitled to be subrogated to any of the rights of the Holders against the
Company or any other guarantor or guaranty or right of offset held by the
Holders for the payment of the Obligations, nor shall the Guarantor seek or
be
entitled to seek any contribution or reimbursement from the Company or any
other
guarantor in respect of payments made by the Guarantor hereunder, until all
amounts owing to the Holders by the Company on account of the Obligations are
paid in full. If any amount shall be paid to the Guarantor on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid and performed in full, such amount shall be held in trust for the benefit
of the Holders, segregated from other funds of the Guarantor, and shall,
forthwith upon receipt by the Guarantor, be turned over to the Holders in the
exact form received by such Guarantor (duly indorsed by the Guarantor to the
Holders, if required), to be applied against the Obligations, whether matured
or
unmatured, in such order as the Holders may determine.
2.5 Amendments,
Etc. With Respect To The Obligations.
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantor and without notice to or further
assent by the Guarantor, any demand for payment or performance of any of the
Obligations made by any of the Holders may be rescinded by such Holder and
any
of the Obligations continued, and the Obligations, or the liability of any
other
Person upon or for any part thereof, or guaranty 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 Holders, and the Purchase Agreement, the Notes and the other
Agreements and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in whole or
in
part, as the Holders may deem advisable from time to time, and any guaranty
or
right of offset at any time held by the Purchasers for the payment of the
Obligations may be sold, exchanged, waived, surrendered or
released.
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2.6 Guaranty
Absolute And Unconditional.
Guarantor hereby 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
Holders upon the guaranty contained in this Section 2 or acceptance of the
guaranty 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 Guaranty contained in this
Section 2; and all dealings between the Company and the Guarantor, on the one
hand, and the Holders, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon the guaranty contained
in this Section 2. Guarantor hereby 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 the Guarantor with respect to the
Obligations. Guarantor understands and agrees that the guaranty contained in
this Section 2 shall be construed as a continuing, absolute and unconditional
Guaranty of payment and performance without regard to (a) the validity or
enforceability of the Purchase Agreement, Notes or any of the other Agreements,
any of the Obligations or any other guaranty or right of offset with respect
thereto at any time or from time to time held by the Holders, (b) any defense,
set-off or counterclaim (other than a defense of actual payment and performance
of all Obligations) which may at any time be available to or be asserted by
the
Company or any other Person against the Holders, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Company or Guarantor)
which constitutes, or might be construed to constitute, an equitable or legal
discharge of the Company for the Obligations, or of Guarantor under the guaranty
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 Guarantor, the Holders 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 or any other Person or against any other guaranty for the
Obligations or any right of offset with respect thereto, and any failure by
the
Holders to make any such demand, to pursue such other rights or remedies or
to
collect any payments from the Company or any other Person or to realize upon
any
such other guaranty or to exercise any such right of offset, or any release
of
the Company or any other Person or any such other guaranty or right of offset,
shall not relieve 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 Holders against any Guarantor.
2.7 Reinstatement.
The
guaranty 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 Holders upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Company, Guarantor or any other guarantor of the
Obligations, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Company, Guarantor
or
any other guarantor of the Obligations or any substantial part of its property,
or otherwise, all as though such payments had not been made.
2.8 Payments.
Guarantor hereby guarantees that payments hereunder will be paid to the Holders
without set-off or counterclaim in U.S. dollars at the addresses set forth
or
referred to on the signature pages to the Purchase Agreement (or as otherwise
required by the Notes) or by wire transfer pursuant to instructions provided
to
the Guarantor by the Holders.
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SECTION
3. REPRESENTATIONS
AND WARRANTIES
Guarantor
represents and warrants to the Holders that:
3.1 Organization,
Good Standing and Qualification.
The
Guarantor is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority to carry on its business as now
conducted and own its properties. The Guarantor is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property makes such
qualification or licensing necessary unless the failure to so qualify would
not
be reasonably likely to result in a Material Adverse Effect. The Guarantor
does
not have any subsidiaries, except for New Brunswick Medical Inc, a Delaware
corporation which is a wholly-owned subsidiary of the Guarantor, which
subsidiary does not own a material amount of assets. The Guarantor is a
wholly-owned subsidiary of the Company and owns, and has good and marketable
title to, all the Mortgaged Property (as defined in the Mortgage) free and
clear
of all liens, claims, encumbrances and defects except those that would not
individually or in the aggregate materially affect the value thereof or
materially interfere with the use made or currently planned to be made
thereof.
3.2 Authorization.
The
Guarantor has full power and authority and has taken all requisite action on
the
part of the Guarantor, its officers, directors and stockholders necessary for
(i) the authorization, execution and delivery of this Guaranty and the Mortgage,
and (ii) authorization of the performance of all obligations of the Guarantor
hereunder and thereunder. This Guaranty and the Mortgage constitute legal,
valid
and binding obligations of the Guarantor, enforceable against the Guarantor
in
accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability, relating to or affecting
creditors’ rights generally.
3.3 Consents.
The
execution, delivery and performance by the Company of this Guaranty and the
Mortgage require no consent of, action by or in respect of, or filing with,
any
Person, governmental body, agency, or official, other than the filing of the
Mortgage with the appropriate office in Xxxxxx County in the State of New
Jersey, the filing of a UCC-1 financing statement fixture filing with Xxxxxx
County in the State of New Jersey, the filing of a UCC-1 financing statement
describing the Mortgaged Property (as defined in the Mortgage) with the
Secretary of State of the State of Delaware, and the filing of the release
and/or satisfaction of the mortgage on the Mortgaged Property currently held
by
Twin Rivers Associates LLC with the appropriate office in Xxxxxx County in
the
State of New Jersey.
3.4 No
Conflict, Breach, Violation or Default; Compliance with Law.
The
execution, delivery and performance of this Guaranty and the Mortgage by the
Guarantor will not conflict with or result in a breach or violation of any
of
the terms and provisions of, or constitute a default under (i) the Guarantor’s
Certificate of Incorporation (including any certificates of designation) or
the
Guarantor’s Bylaws, both as in effect on the date hereof (copies of which have
been provided to the Purchasers before the date hereof), or (ii) except where
it
would not have a Material Adverse Effect, (A) any statute, rule, regulation
or
order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Guarantor or any of its properties, or (B) any
agreement or instrument to which the Guarantor is a party or by which the
Guarantor is bound or to which any of the properties of the Guarantor is
subject. Except where it would not have a Material Adverse Effect, the Guarantor
(i) is not in violation of any statute, rule or regulation applicable to the
Guarantor or its assets, (ii) is not in violation of any judgment, order or
decree applicable to the Guarantor or its assets, and (iii) is not in breach
or
violation of any agreement, note or instrument to which it or its assets are
a
party or are bound or subject. The Guarantor has not received notice from any
Person of any claim or investigation that, if adversely determined, would render
the preceding sentence untrue or incomplete.
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3.5 Incorporation
by Reference.
All the
representations and warranties made in Sections 4.6, 4.7, 4.8, 4.9, 4.12, 4.13,
4.14, 4.15, 4.16, 4.18, 4.19, 4.20 and 4.26 of the Purchase Agreement are true,
accurate and complete as of the date hereof as such representations and
warranties relate and apply to the Guarantor mutatis
mutandis.
3.6 No
Limitation of Guaranty.
No
representations, warranties or agreements of any kind have been made to or
with
Guarantor which would limit or qualify in any way the terms of this
Guaranty.
3.7 Company’s
Request.
This
Guaranty is executed at the Company’s request and not at the request of the
Holders.
3.8 Obtaining
Company Information.
Guarantor has established adequate means of obtaining from the Company on a
continuing basis information regarding the Company’s financial
condition.
3.9 Solvency.
As of
the date hereof and after giving effect to the transactions contemplated hereby
(a) the property of Guarantor, at a fair valuation, will exceed its debt; (b)
the capital of Guarantor will not be unreasonably small to conduct its business;
(c) Guarantor will not have incurred debts, or have intended to incur debts,
beyond its ability to pay such debts as they mature; and (d) the present fair
salable value of the assets of Guarantor will be greater than the amount that
will be required to pay its probable liabilities (including debts) as they
become absolute and matured. For purposes of this Section 3.9, “debt” means any
liability on a claim, and “claim” means (i) the right to payment, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, undisputed, legal, equitable, secured or unsecured, or
(ii)
the right to an equitable remedy for breach of performance if such breach gives
rise to a right to payment, whether or not such right to an equitable remedy
is
reduced to judgment, fixed, contingent, matured, unmatured, undisputed, secured
or unsecured.
SECTION
4. COVENANTS
4.1 Limitations
on Transactions.
So long
as any Notes remain outstanding, the Guarantor shall not directly or indirectly,
create, incur, assume or permit or suffer to exist any lien, mortgage, security
interest or encumbrance (other than statutory liens imposed by law incurred
in
the ordinary course of business for sums not yet delinquent or being contested
in good faith, if such reserve or other appropriate provision, if any, as shall
be required by GAAP shall have been made in respect thereof) upon any of the
Mortgaged Property (as defined in the Mortgage) except for those created by
the
Mortgage and shall not directly or indirectly sell, transfer or lease any of
the
Mortgaged Property, subject to Section 7.2(c) of the Purchase
Agreement.
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4.2 No
Conflicting Agreements.
The
Guarantor will not take any action, enter into any agreement or make any
commitment that would conflict or interfere in any material respect with the
obligations to the Holders under the Agreements.
4.3 Insurance.
So long
as any Notes remain outstanding, the Guarantor shall have in full force and
effect (a) insurance reasonably believed by the Guarantor to be adequate on
all
assets and activities, covering property damage and loss of income by fire
or
other casualty, and (b) insurance reasonably believed to be adequate protection
against all liabilities, claims and risks against which it is customary for
companies similarly situated as the Guarantor to insure.
4.4 Compliance
with Laws.
So long
as any Notes remain outstanding, the Guarantor will use reasonable efforts
to
comply with all applicable laws, rules, regulations, orders and decrees of
all
governmental authorities, except to the extent non-compliance (in one instance
or in the aggregate) would not have a Material Adverse Effect
4.5 Corporate
Existence;
Merger and Consolidation.
So
long
as any Notes remain outstanding, the Guarantor shall maintain its corporate
existence. The Guarantor shall not consolidate with or merge with or into,
or
convey, transfer or lease all or substantially all its assets to, any Person,
except to the same extent that the Company is so permitted, and in accordance
with the same provisions applicable to the Company, in the Purchase Agreement
or
the Notes (with the assumption of obligations applying to the assumption of
the
obligations under this Guaranty).
4.7 Taxes.
The
Guarantor shall pay, and shall cause each of its subsidiaries to pay, prior
to
delinquency, all material taxes, assessments, and governmental levies except
such as are contested in good faith and by appropriate proceedings or where
the
failure to effect such payment is not adverse in any material respect to the
Guarantor or the Holders.
4.8 Stay,
Extension and Usury Laws.
The
Guarantor covenants (to the extent that it may lawfully do so) that it shall
not
at any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law wherever enacted,
now
or at any time hereafter in force, that may affect the covenants or the
performance of this Guaranty; and the Guarantor (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any right herein granted to the Holders, but shall
suffer and permit the execution of every such right as though no such law has
been enacted.
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SECTION
5. SECURITY
5.1 The
Obligations and Guarantor’s obligations hereunder and under the other Agreements
are secured by Mortgaged Property (as defined in the Mortgage) pursuant to
the
terms of the Mortgage (or the Escrow Funds (as defined in the Purchase
Agreement), if the Mortgage is defeased pursuant to Section 7.2(c) of the
Purchase Agreement).
SECTION
6. WAIVERS;
SUBORDINATION
6.1 Guarantor’s
Waivers.
(a) Holder’s
Actions.
Notwithstanding any other waivers by the Guarantor pursuant to this Guaranty
and
except as prohibited by applicable law, the Guarantor waives any right to
require a Holder to: (i) continue lending money or to extend other credit to
the
Company; (ii) resort for payment or to proceed directly or at once against
any
person, including the Company or any other guarantor; (iii) commit any act
or
omission of any kind at any time with respect to any matter whatsoever; or
(iv)
demand and/or enforce compliance with the terms of any agreement by any other
party thereto.
(b) Insolvency.
If now
or hereafter the Company shall be or become insolvent and the Obligations under
the Notes have not been paid and performed in full, Guarantor hereby waives
and
relinquishes in favor of the Holders and Company, and their respective
successors and assigns (subject to Section 2.7 above, until all Obligations
have
been paid in full), any claim or right to payment Guarantor may now have or
hereafter have or acquire against the Company, by subrogation or otherwise,
such
that at no time shall Guarantor be or become a “creditor” of the Company within
the meaning of 11 U.S.C. Section 547(b) or any successor provision of the United
States Federal bankruptcy laws.
(c) Guarantor’s
Rights and Defenses.
Guarantor also waives any and all rights or defenses arising by reason of (i)
any “one action” or “anti-deficiency” law or any other law which may prevent the
Holders from bringing any action, including a claim for deficiency, against
the
Guarantor, before or after the commencement or completion of any foreclosure
action, either judicially or by exercise of a power of sale; (ii) any election
of remedies by the Holders which destroys or otherwise adversely affects the
Guarantor’s subrogation rights or the Guarantor’s rights to proceed against the
Company for reimbursement, including without limitation, any loss of rights
Guarantor may suffer by reason of any law limiting, qualifying, or discharging
the Obligations; (iii) any disability or other defense of the Company, of any
other guarantor, or of any other person, or by reason of the cessation of the
Company’s liability from any cause whatsoever, other than payment in full in
legal tender or by performance in full, of the Obligations; (iv) any statute
of
limitations, if at the time any action or suit brought by the Holders against
the Guarantor is commenced there is outstanding Obligations which are not barred
by any applicable statute of limitations; (v) any defenses given to guarantors
at law or in equity other than actual payment and performance of the
Obligations; or (vi) any act, omission, election or waiver by the Holders of
the
type set forth in this Guaranty.
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(d) No
Set-off, Counterclaim, Etc.
Guarantor further waives and agrees not to assert or claim at any time any
deductions to the amount guaranteed under this Guaranty for any claim of
set-off, counterclaim, counter demand, recoupment or similar right.
6.2 Guarantor’s
Understanding With Respect to Waivers.
Guarantor warrants and agrees that each of the waivers set forth herein is
made
with Guarantor’s full knowledge of its significance and consequences and that,
under the circumstances, the waivers are reasonable and not contrary to public
policy or law. If any such waiver is determined to be contrary to any applicable
law or public policy, such waiver shall be effective only to the extent
permitted by law or public policy.
6.3 Subordination
of the Company’s Debts to Guarantor.
Guarantor agrees that the Obligations of the Company to the Holders, whether
now
existing or hereafter created, shall be prior to any claim that the Guarantor
may now have or hereafter acquire against the Company, whether or not the
Company becomes insolvent. Guarantor hereby expressly subordinates to the
Obligations any claim Guarantor may have against the Company, upon any account
whatsoever (including without limitation all intercompany obligations owing
to
Guarantor from the Company), to any claim that the Holders may now or hereafter
have against the Company; provided,
however,
that
the Company may make payments on such claims that represent bona fide claims
for
money lent or property transferred to the Company in the ordinary course of
the
business of the Guarantor and the Company unless and until an Event of Default
(including without limitation any default under the Agreements which with notice
or passage of time or both would become an Event of Default) shall have occurred
under the Notes. In the event of any dissolution, winding up, liquidation,
readjustment, reorganization or similar proceedings, through bankruptcy, by
an
assignment for the benefit of creditors, by voluntary liquidation, or otherwise,
the assets of the Company applicable to the payment of the claims of both the
Holders and the Guarantor shall be paid to the Holders.
SECTION
7. MISCELLANEOUS
7.1 Amendments
In Writing.
None of
the terms or provisions of this Guaranty may be amended, supplemented or
otherwise modified except by an instrument in writing signed by the Guarantor
and 75% in interest of the Holders, and no provision hereof may be waived other
than by an instrument in writing signed by the party against whom enforcement
is
sought.
7.2 Notices.
All
notices, requests and demands to or upon the Holders or Guarantor hereunder
shall be effected in the manner provided for in Section 9.4 of the Purchase
Agreement or Section 3(h) of the Notes; provided
that
any
such notice, request or demand to or upon Guarantor shall be addressed to
Guarantor at:
c/o
NexMed, Inc.
00
Xxxx
Xxxxxx Xxxxx
Xxxx
Xxxxxxx, XX 00000
Fax:
(000) 000-0000
Attention:
Chief Financial Officer
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or
at
such other address as Guarantor may designate by ten days’ advance written
notice to all Holders.
7.3 No
Waiver By Course Of Conduct; Cumulative Remedies. The
Holders shall not by any act (except by a written instrument pursuant to Section
7.1), delay, indulgence, omission or otherwise be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Event of Default. No
failure to exercise, nor any delay in exercising, on the part of the Holders,
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 any Holder of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right
or
remedy which such Holder 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.
7.4 Enforcement
Expenses; Indemnification.
(a) Guarantor
agrees to pay or reimburse the Holders for all their reasonable costs and
expenses incurred in collecting against the Guarantor under the guaranty
contained in Section 2 or otherwise enforcing or preserving any rights under
this Guaranty and the other Agreements to which such Guarantor is a party,
including, without limitation, the reasonable fees and disbursements of counsel
to the Holders.
(b) Guarantor
agrees to pay, and to save the Holders 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 (other than any taxes based upon any Holder’s net
income) which may be payable or determined to be payable in connection with
any
of the transactions contemplated by this Guaranty.
(c) Guarantor
agrees to pay, and to save the Holders 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
Guaranty to the extent the Company would be required to do so pursuant to the
Purchase Agreement or the other Agreements.
(d) The
agreements in this Section shall survive repayment of the Obligations and all
other amounts payable under the Notes and the other Agreements.
7.5 Successors
And Assigns.
This
Guaranty shall be binding upon the successors and assigns of Guarantor and
shall
inure to the benefit of the Holders and their respective successors and assigns;
provided
that
Guarantor may not assign, transfer or delegate any of its rights or obligations
under this Guaranty without the prior written consent of the holders of 75%
of
the outstanding Principal Amount of Notes.
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7.6 Set-Off.
Guarantor hereby irrevocably authorizes the Holders at any time and from time
to
time while an Event of Default shall have occurred and be continuing, without
notice to Guarantor or any other guarantor of the Obligations, any such notice
being expressly waived by Guarantor, to set-off and appropriate and apply any
and all deposits (general or special, time or demand, provisional or final),
in
any currency, and any other 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 Holders to or for the credit or
the
account of Guarantor, or any part thereof in such amounts as the Holders may
elect, against and on account of the obligations and liabilities of Guarantor
to
the Holders hereunder and claims of every nature and description of the Holders
against Guarantor, in any currency, whether arising hereunder, under the Notes,
any of the other Agreements or otherwise, as the Holders may elect, whether
or
not the Holders have made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The Holders shall notify
such Guarantor promptly of any such set-off and the application made by the
Holders 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 Holders under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Holders may have.
7.7 Facsimile.
This
Guaranty may be executed by facsimile.
7.8 Severability.
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.
7.9 Section
Headings.
The
Section headings used in this Guaranty are for convenience of reference only
and
are not to affect the construction hereof or be taken into consideration in
the
interpretation hereof.
7.10 Integration.
This
Guaranty and the other Agreements represent the agreement of the Guarantor
and
the Purchasers with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by the Purchasers
relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Agreements.
7.11 Governing
Law; Jurisdiction.
(a) Governing
Law. THIS
GUARANTY WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAWS PROVISIONS THEREOF
THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER
JURISDICTION.
(b) Jurisdiction.
The
Guarantor irrevocably submits to the exclusive jurisdiction of any State or
Federal Court sitting in the State of New York, County of New York, over any
suit, action, or proceeding arising out of or relating to this Guaranty. The
Guarantor irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of
any
such suit, action, or proceeding brought in such a court and any claim that
suit, action, or proceeding has been brought in an inconvenient
forum.
11
The
Guarantor agrees that the service of process upon it mailed by certified or
registered mail (and service so made shall be deemed complete three days after
the same has been posted as aforesaid) or by personal service shall be deemed
in
every respect effective service of process upon it in any such suit or
proceeding. Nothing herein shall affect Holder's right to serve process in
any
other manner permitted by law. The Guarantor agrees that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful
manner.
(c) No
Jury Trial.
The
Guarantor and, by acceptance of the benefits hereof, each Holder, knowingly
and
voluntarily waives any and all rights it may have to a trial by jury with
respect to any litigation based on, or arising out of, under, or in connection
with, this Guaranty and for any counterclaim therein.
7.12 Acknowledgements.
Guarantor hereby acknowledges that:
(a) it
has
been advised by counsel in the negotiation, execution and delivery of this
Guaranty and the other Agreements to which it is a party;
(b) the
Holders have no fiduciary relationship with or duty to Guarantor arising out
of
or in connection with this Guaranty or any of the other Agreements, and the
relationship between the Guarantor, on the one hand, and the Holders, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no
joint
venture is created hereby or by the other Agreements or otherwise exists by
virtue of the transactions contemplated hereby among the Guarantors and the
Holders.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly executed
and delivered as of the date first above written.
|
GUARANTOR:
|
||
|
NEXMED
(U.S.A.), INC.
|
||
|
By:
|
/s/
Xxxxxx Xxx
|
|
|
Name:
|
Xxxxxx
Xxx
|
|
|
Title:
|
Chief
Executive Officer
|
|
ACKNOWLEDGMENT
|
STATE
OF New Jersey
|
)
|
|
)
ss.:
|
|
|
COUNTY
OF Xxxxxx
|
)
|
On
this
30th day of June, 2008, before me, the undersigned, personally appeared Xxxxxx
Xxx, the Chief Executive Officer of NEXMED (U.S.A.), INC., a Delaware
corporation, who, I am satisfied, is the person who signed the foregoing
instrument, and he did acknowledge under oath that he signed, sealed with the
corporate seal, and delivered the same in his capacity as such officer and
that
the foregoing instrument is the voluntary act and deed of such corporation,
made
by virtue of the authority of its board of directors.
IN
WITNESS WHEREOF, I have hereunto set my hand and official seal.
|
/s/
Xxxxxx X. Xxxxxxx
|
|
|
Notary
Public
|
(Notarial
Seal)
13
