GUARANTY
Exhibit 10.5
GUARANTY (the “Guaranty”),
dated as of January 9, 2009, by Urigen N.A., Inc., a Delaware corporation with
an address of 00 Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx, 00000 (the
“Guarantor”), in favor of the Purchasers identified in the Purchase Agreement
(as defined below) (collectively, “Secured Parties”).
WHEREAS, the Guarantor is a
subsidiary or affiliate of Urigen Pharmaceuticals, Inc. (the “Borrower”);
and
WHEREAS, in accordance with
certain senior secured convertible notes, dated as of the date hereof (the
“Notes”), executed by the Borrower, and certain related agreements between the
Borrower and the Secured Parties (collectively, as amended, restated, or
extended from time to time, the “Loan Documents”), the Secured Parties have
agreed to loan to the Borrower up to Two Hundred Fifty-Seven Thousand Dollars
($257,000) (the “Loan”); and
WHEREAS, the Secured Parties’
willingness to extend the loan is conditioned upon the Guarantor executing and
delivering this Guaranty; and
WHEREAS, the aforesaid Loan
will be beneficial to the Guarantor inasmuch as the proceeds of the Loan to the
Borrower will indirectly benefit the Guarantor;
NOW, THEREFORE, in order to
induce the Secured Parties to make the Loan to the Borrower pursuant to the Loan
Documents, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the Guarantor, the Guarantor
hereby agrees as follows:
1. Guaranty of Payment and
Performance. The Guarantor hereby guarantees to the Secured
Parties the full and punctual payment when due (whether at maturity, by
acceleration or otherwise), and the performance, of all liabilities, agreements
and other obligations of the Borrower to the Secured Parties, whether direct or
indirect, absolute or contingent, due or to become due, secured or unsecured,
now existing or hereafter arising or acquired (whether by way of discount,
letter of credit, lease, loan, overdraft or otherwise), including without
limitation all obligations under the Note (collectively, the
“Obligations”). This Guaranty is an absolute, unconditional and
continuing guaranty of the full and punctual payment and performance of the
Obligations and not of their collectibility only and is in no way conditioned
upon any requirement that the Secured Parties first attempt to collect any of
the Obligations from the Borrower or resort to any security or other means of
obtaining their payment. Should the Borrower default in the payment
or performance of any of the Obligations, the obligations of the Guarantor
hereunder shall become immediately due and payable to the Secured Parties,
without demand or notice of any nature, all of which are expressly waived by the
Guarantor. Payments by the Guarantor hereunder may be required by the
Secured Parties on any number of occasions.
2. Guarantor’s Agreement to
Pay. The Guarantor further agrees, as the principal obligor
and not as a guarantor only, to pay to the Secured Parties, on demand, all
reasonable costs and expenses (including court costs and reasonable legal
expenses) incurred or expended by the Secured Parties in connection with
enforcement of this Guaranty, together with interest on amounts
recoverable under this Guaranty from the time such amounts become due under this
Guaranty until payment, at the rate per annum equal to the default rate set
forth in the Note; provided that if such interest exceeds the maximum amount
permitted to be paid under applicable law, then such interest shall be reduced
to such maximum permitted amount.
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3. Unlimited
Guaranty. The liability of the Guarantor hereunder shall be
unlimited to the extent of the Obligations and the other obligations of the
Guarantor hereunder (including, without limitation, under Section 2
above). The Guarantor hereby covenants not to take any action that
would constitute (or otherwise cause) an Event of Default under the
Notes.
4. Waivers by Guarantor; Secured Party’s
Freedom to Act. The Guarantor agrees that the Obligations will
be paid and performed strictly in accordance with their respective terms
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Secured Parties
with respect thereto. The Guarantor waives presentment, demand,
protest, notice of acceptance, notice of Obligations incurred and all other
notices of any kind, all defenses which may be available to Borrower by virtue
of any valuation, stay, moratorium law or other similar law now or hereafter in
effect, any right to require the marshalling of assets of the Borrower, and all
suretyship defenses generally. Without limiting the generality of the foregoing,
the Guarantor agrees to the provisions of any instrument evidencing, securing or
otherwise executed in connection with any Obligation and agrees that the
obligations of the Guarantor hereunder shall not be released or discharged, in
whole or in part, or otherwise affected by (i) the failure of any Secured
Party to assert any claim or demand or to enforce any right or remedy against
the Borrower; (ii) any extensions or renewals of any Obligation;
(iii) any rescissions, waivers, amendments or modifications of any of the
terms or provisions of any agreement evidencing, securing or otherwise executed
in connection with any Obligation (provided, that, the obligations of the
Guarantor hereunder shall be appropriately modified to reflect any amendment or
modification of the Obligations); (iv) the substitution or release of any
entity primarily or secondarily liable for any Obligation; (v) the adequacy
of any rights any Secured Party may have against any collateral or other means
of obtaining repayment of the Obligations; (vi) the impairment of any
collateral securing the Obligations, including without limitation the failure to
perfect or preserve any rights a Secured Party might have in such collateral or
the substitution, exchange, surrender, release, loss or destruction of any such
collateral; or (vii) any other act or omission which might in any manner or
to any extent vary the risk of the Guarantor or otherwise operate as a release
or discharge of any other guarantor, all of which may be done without notice to
the Guarantor.
5. Unenforceability of Obligations
Against Borrower. If for any reason the Borrower has no legal
existence or is under no legal obligation to discharge any of the Obligations,
or if any of the Obligations have become irrecoverable from the Borrower by
operation of law or for any other reason, this Guaranty shall nevertheless be
binding on the Guarantor to the same extent as if the Guarantor at all times had
been the principal obligor on all such Obligations. In the event that
acceleration of the time for payment of the Obligations is stayed upon the
insolvency, bankruptcy or reorganization of the Borrower, or for any other
reason, all such amounts otherwise subject to acceleration under the terms of
any agreement evidencing, securing or otherwise executed in connection with any
Obligation shall be immediately due and payable by the Guarantor.
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6. Subrogation;
Subordination. Until the payment and performance in full of
all Obligations, the Guarantor shall not exercise any rights against the
Borrower arising as a result of payment by any Guarantor hereunder, by way of
subrogation or otherwise, and will not prove any claim in competition with any
Secured Party or its affiliates in respect of any payment hereunder in
bankruptcy or insolvency proceedings of any nature; the Guarantor will not claim
any set-off or counterclaim against the Borrower in respect of any liability of
the Guarantor to the Borrower; and the Guarantor waives any benefit of and any
right to participate in any collateral which may be held by any Secured
Party. The payment of any amounts due with respect to any
indebtedness of the Borrower now or hereafter held by the Guarantor is hereby
subordinated to the prior payment in full of the Obligations. The
Guarantor agrees that after the occurrence of any default in the payment or
performance of the Obligations, after the expiration of any applicable cure
period, it will not demand, xxx for or otherwise attempt to collect after such
time any such indebtedness of the Borrower to the Guarantor until the
Obligations shall have been paid in full. If, notwithstanding the foregoing
sentence, the Guarantor shall collect, enforce or receive any amounts in respect
of such indebtedness, such amounts shall be collected, enforced and received by
the Guarantor as trustee for the Secured Parties and be paid over to the Secured
Parties on account of the Obligations without affecting in any manner the
liability of the Guarantor under the other provisions of this
Guaranty.
7. Further
Assurances. The Guarantor agrees to do all such things and
execute all such documents, as a Secured Party may consider reasonably necessary
or desirable to give full effect to this Guaranty and to perfect and preserve
the rights and powers of a Secured Party hereunder.
8. Termination;
Reinstatement. This Guaranty shall remain in full force and
effect until the earlier of: (i) the Obligations are paid in full or otherwise
satisfied (including by the conversion in full of the Notes) (other than
contingent indemnity obligations), and not subject to any recapture or
preference in bankruptcy or similar proceedings, and the Secured Parties have no
further commitment to extent credit to the Borrower or (ii) the Secured Parties
are given written notice of the Guarantor’s intention to discontinue this
Guaranty, notwithstanding any intermediate or temporary payment or settlement of
the whole or any part of the Obligations. No such notice under (ii)
above shall be effective against a Secured Party unless received and
acknowledged by an officer of a Secured Party. Without limiting the
generality of the foregoing sentence, the Guarantor will be released from all
liability hereunder concurrently with either the repayment of in full of all
amounts owed under the Notes or the conversion in full of the
Notes. No notice under (ii) above shall affect any rights of a
Secured Party or of any affiliate hereunder with respect to any Obligations
incurred prior to such notice. This Guaranty shall continue to be
effective or be reinstated, notwithstanding any notice or termination, if at any
time any payment made or value received with respect to an Obligation is
rescinded or must otherwise be returned by a Secured Party upon the insolvency,
bankruptcy or reorganization of the Borrower, or otherwise, all as though such
payment had not been made or value received.
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9. Successors and
Assigns. This Guaranty shall be jointly and severally binding
upon the Guarantor, its successors and assigns, and shall inure to the benefit
of and be enforceable by the Secured Parties and their successors, transferees
and assigns. Without limiting the generality of the foregoing
sentence, the Secured Parties may assign or otherwise transfer any agreement or
any note held by it evidencing, securing or otherwise executed in connection
with the Obligations, or sell participations in any interest therein, to any
other person or entity, and such other person or entity shall thereupon become
vested, to the extent set forth in the agreement evidencing such assignment,
transfer or participation, with all the rights in respect thereof granted to the
Secured Parties herein.
10. Amendments and
Waivers. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by the Guarantor therefrom shall be
effective unless the same shall be in writing and signed by the Secured Parties
holding a majority of the principal amount of the Notes. No failure
on the part of a Secured Party to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right.
12. Governing Law; Consent to
Jurisdiction. This Guaranty shall be governed by, and
construed in accordance with, the laws of the State of New York without
reference to its conflicts of laws provisions. The Guarantor agrees
that any suit for the enforcement of this Guaranty may be brought in the courts
of the State of New York or any federal court sitting therein and consents to
the non-exclusive jurisdiction of such court and to service of process in any
such suit being made upon the Guarantor by mail at the address specified in
Section 11 hereof. The Guarantor hereby waives any objection that it
may now or hereafter have to the venue of any such suit or any such court or
that such suit was brought in an inconvenient court. Any enforcement
action relating to this Guarantee may be brought by motion for summary judgment
in lieu of a complaint pursuant to Section 3213 of the New York Civil Practice
Law and Rules. In no event shall the rate of interest payable
hereunder exceed the maximum rate (if any) permitted by applicable
law.
13. WAIVER
OF JURY TRIAL. THE GUARANTOR AND, BY THEIR ACCEPTANCE OF THIS GUARANTY, EACH
SECURED PARTY, HEREBY WAIVES TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH
RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF: (A) THIS GUARANTY OR ANY
OTHER INSTRUMENT OR DOCUMENT DELIVERED IN CONNECTION WITH THE OBLIGATIONS;
(B) THE VALIDITY, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF; OR
(C) ANY OTHER CLAIM OR DISPUTE HOWEVER ARISING BETWEEN THE GUARANTOR AND
ANY SECURED PARTY.
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14. Certain
References. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the person, persons, entity or entities may require. The
terms “herein”, “hereof” or “hereunder” or similar terms used in this Guaranty
refer to this entire Guaranty and not only to the particular provision in which
the term is used.
15. Miscellaneous. This
Guaranty, together with the Security Agreement, delivered by the Guarantor as of
the date hereof to the Secured Parties, constitutes the entire agreement of the
Guarantor with respect to the matters set forth herein. The rights
and remedies herein provided are cumulative and not exclusive of any remedies
provided by law or any other agreement, and this Guaranty shall be in addition
to any other guaranty of the Obligations. The invalidity or
unenforceability of any one or more sections of this Guaranty shall not affect
the validity or enforceability of its remaining provisions. Captions are for the
ease of reference only and shall not affect the meaning of the relevant
provisions. The meanings of all defined terms used in this Guaranty
shall be equally applicable to the singular and plural, masculine, feminine and
generic forms of the terms defined.
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IN WITNESS WHEREOF, the
Guarantor has caused this Guaranty to be executed and delivered as of the date
appearing in the introductory paragraph of this Guaranty.
URIGEN
N.A., INC.
By: /s/ Xxxxxx X.
Xxxxxxx
Name:
Xxxxxx X. Xxxxxxx
Title:
Chief Financial Officer
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