Exhibit 10.5
UNCONDITIONAL GUARANTY
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This Unconditional Guaranty ("Guaranty") is entered into as of May 9,
2006, by Xxxxxxx Advanced Aesthetics, Inc., a Delaware corporation
("Guarantor"), in favor of Pequot Healthcare Fund, L.P., Pequot Healthcare
Offshore Fund, Inc., Premium Series PCC Limited - Cell 32, Pequot Diversified
Master Fund, Ltd., Pequot Healthcare Institutional Fund, L.P., North Sound
Legacy International Ltd. and Xxxxxxx Investments LLC (each a "Lender" and
collectively, the "Lenders").
Recitals
A. Concurrently herewith, Lenders and XXXXXXX.XXX, INC., a Delaware
corporation ("Borrower"), are entering into that certain Loan Agreement dated of
even date herewith (as amended, restated, or otherwise modified from time to
time, the "Loan Agreement") pursuant to which Lenders have agreed to make
certain advances of money and to extend certain financial accommodations to
Borrower (collectively, the "Loans"), subject to the terms and conditions set
forth therein. Capitalized terms used but not otherwise defined herein shall
have the meanings given them in the Loan Agreement.
B. In consideration of the agreement of Lenders to make the Loans to
Borrower under the Loan Agreement, Guarantor is willing to guaranty the full
payment and performance by Borrower of all of its obligations thereunder and
under the other Financing Documents, all as further set forth herein.
C. Guarantor is a subsidiary of Borrower and will obtain substantial
direct and indirect benefit from the Loans made by Lenders to Borrower under the
Loan Agreement.
NOW, THEREFORE, to induce Lenders to enter into the Loan Agreement, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, Guarantor hereby
represents, warrants, covenants and agrees as follows:
Section 1. Guaranty.
1.1 Unconditional Guaranty of Payment. In consideration of the
foregoing, Guarantor hereby irrevocably, absolutely and unconditionally
guarantees to Lenders the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of all Obligations.
1.2 Separate Obligations. These obligations are independent of
Borrower's obligations and separate actions may be brought against Guarantor
(whether action is brought against Borrower or whether Borrower is joined in the
action).
Section 2. Representations and Warranties.
Guarantor hereby represents and warrants that:
(a) Guarantor (i) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware; (ii) is duly
qualified to do
business and is in good standing in every jurisdiction where the nature of its
business requires it to be so qualified (except where the failure to so qualify
would not have a material adverse effect on Guarantor's condition, financial or
otherwise, or on Guarantor's ability to pay or perform the obligations
hereunder); and (iii) has all requisite power and authority to execute and
deliver this Guaranty and each Financing Document executed and delivered by
Guarantor pursuant to the Loan Agreement or this Guaranty and to perform its
obligations thereunder and hereunder.
(b) The execution, delivery and performance by Guarantor of this
Guaranty (i) are within Guarantor's powers and have been duly authorized by all
necessary action; (ii) do not contravene Guarantor's charter documents or any
law or any contractual restriction binding on or affecting Guarantor or by which
Guarantor's property may be affected; (iii) do not require any authorization or
approval or other action by, or any notice to or filing with, any governmental
authority or any other Person under any indenture, mortgage, deed of trust,
lease, agreement or other instrument to which Guarantor is a party or by which
Guarantor or any of its property is bound, except such as have been obtained or
made; and (iv) do not result in the imposition or creation of any Lien upon any
property of Guarantor.
(c) This Guaranty is a valid and binding obligation of Guarantor,
enforceable against Guarantor in accordance with its terms, except as the
enforceability thereof may be subject to or limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws relating to or
affecting the rights of creditors generally.
(d) There is no action, suit or proceeding affecting Guarantor
pending or threatened before any court, arbitrator, or governmental authority,
domestic or foreign, which may have a material adverse effect on the ability of
Guarantor to perform its obligations under this Guaranty.
(e) Guarantor's obligations hereunder are not subject to any offset
or defense against Lenders or Borrower of any kind.
(f) The incurrence of Guarantor's obligations under this Guaranty
will not cause Guarantor to (i) become insolvent; (ii) be left with unreasonably
small capital for any business or transaction in which Guarantor is presently
engaged or plans to be engaged; or (iii) be unable to pay its debts as such
debts mature.
(g) Guarantor covenants, warrants, and represents to Lenders that
all representations and warranties contained in this Guaranty shall be true at
the time of Guarantor's execution and delivery of this Guaranty, and shall
continue to be true so long as this Guaranty remains in effect. Guarantor
expressly agrees that any misrepresentation or breach of any warranty whatsoever
contained in this Guaranty shall be deemed material.
Section 3. General Waivers. Guarantor waives:
(a) Any right to require Lenders to (i) proceed against Borrower or
any other Person; (ii) proceed against or exhaust any security or (iii) pursue
any other remedy. Lenders may exercise or not exercise any right or remedy they
has against Borrower or any security it holds without affecting Guarantor's
liability hereunder.
(b) Any defenses from disability or other defense of Borrower or
from the cessation of Borrower's liabilities.
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(c) Any setoff, defense or counterclaim against Lenders.
(d) Any defense from the absence, impairment or loss of any right of
reimbursement or subrogation or any other rights against Borrower. Until
Borrower's obligations to Lenders have been paid, Guarantor has no right of
subrogation or reimbursement or other rights against Borrower.
(e) Any right to enforce any remedy that Lenders has against
Borrower.
(f) Any rights to participate in any security held by Lenders.
(g) Any demands for performance, notices of nonperformance or of new
or additional indebtedness incurred by Borrower to Lenders. Guarantor is
responsible for being and keeping itself informed of Borrower's financial
condition.
(h) The benefit of any act or omission by Lenders which directly or
indirectly results in or aids the discharge of Borrower from any of the
Obligations by operation of law or otherwise.
Section 4. Reinstatement. Notwithstanding any provision of the Loan
Agreement to the contrary, the liability of Guarantor hereunder shall be
reinstated and revived and the rights of Lenders shall continue if and to the
extent that for any reason any payment by or on behalf of Guarantor or Borrower
is rescinded or must be otherwise restored by Lenders, whether as a result of
any proceedings in bankruptcy or reorganization or otherwise, all as though such
amount had not been paid. The determination as to whether any such payment must
be rescinded or restored shall be made by Lenders in their sole discretion;
provided, however, that if Lenders choose to contest any such matter at the
request of Guarantor, Guarantor agrees to indemnify and hold harmless Lenders
from all costs and expenses (including, without limitation, reasonable
attorneys' fees) of such litigation. To the extent any payment is rescinded or
restored, Guarantor's obligations hereunder shall be revived in full force and
effect without reduction or discharge for that payment.
Section 5. No Waiver; Amendments. No failure on the part of Lenders to
exercise, no delay in exercising and no course of dealing with respect to, 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. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law. This Guaranty may
not be amended or modified except by written agreement between Guarantor and
Lenders, and no consent or waiver hereunder shall be valid unless in writing and
signed by Lenders.
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Section 6. Compromise and Settlement. No compromise, settlement, release,
renewal, extension, indulgence, change in, waiver or modification of any of the
Obligations or the release or discharge of Borrower from the performance of any
of the Obligations shall release or discharge Guarantor from this Guaranty or
the performance of the obligations hereunder.
Section 7. Subordination Provisions. Notwithstanding anything herein to
the contrary, no payment shall be made under this Guaranty except with the prior
written consent of Technology Investment Capital Corporation, the holder of the
Company's outstanding senior indebtedness and any other holders of any other
senior debt or senior subordinated debt at the time outstanding.
Section 8. Notice. Any notice or other communication herein required or
permitted to be given shall be in writing and may be delivered in person or sent
by facsimile transmission, overnight courier, or by United States mail,
registered or certified, return receipt requested, postage prepaid and addressed
as follows:
If to Guarantor: Xxxxxxx Advanced Aesthetics, Inc.
000 Xxxxxxx 0, 0xx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Telephone No.: 000-000-0000
If to Lenders: PEQUOT HEALTHCARE FUND, L.P.
PEQUOT HEALTHCARE OFFSHORE FUND, INC.
PREMIUM SERIES PCC LIMITED - CELL 32
PEQUOT DIVERSIFIED MASTER FUND, LTD.
PEQUOT HEALTHCARE INSTITUTIONAL FUND, L.P.
c/o Pequot Capital Management
Attn: Xxxxx Xxxxxx
000 Xxxxx Xxxxxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telephone No. 000-000-0000
NORTH SOUND LEGACY
INSTITUTIONAL FUND LLC
NORTH SOUND LEGACY
INTERNATIONAL LTD.
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telephone No.: 000-000-0000
XXXXXXX INVESTMENTS LLC
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telephone No.: 000-000-0000
or at such other address as may be substituted by notice given as herein
provided. Every notice, demand, request, consent, approval, declaration or other
communication hereunder shall be deemed to have been duly given or served on the
date on which personally delivered or sent by facsimile transmission or three
(3) Business Days after the same shall have been deposited in the United States
mail. If sent by overnight courier service, the date of delivery shall be deemed
to be the next Business Day after deposited with such service.
Section 9. Entire Agreement. This Guaranty constitutes and contains the
entire agreement of the parties and supersedes any and all prior and
contemporaneous agreements,
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negotiations, correspondence, understandings and communications between
Guarantor and Lender, whether written or oral, respecting the subject matter
hereof.
Section 10. Severability. If any provision of this Guaranty is held to be
unenforceable under applicable law for any reason, it shall be adjusted, if
possible, rather than voided in order to achieve the intent of Guarantor and
Lenders to the extent possible. In any event, all other provisions of this
Guaranty shall be deemed valid and enforceable to the full extent possible under
applicable law.
Section 11. Payment of Expenses. Guarantor shall pay, promptly on demand,
all Expenses incurred by Lenders in defending and/or enforcing this Guaranty.
For purposes hereof, "Expenses" shall mean costs and expenses (including
reasonable fees and disbursements of any law firm) for defending and/or
enforcing this Guaranty (including those incurred in connection with appeals or
proceedings by or against any Guarantor under the United States Bankruptcy Code,
or any other bankruptcy or insolvency law, including assignments for the benefit
of creditors, compositions, extensions generally with its creditors, or
proceedings seeking reorganization, arrangement, or other relief).
Section 12. Assignment. This Guaranty shall be binding upon and inure to
the benefit of Guarantor and Lenders and their respective successors and
assigns.
Section 13. Governing Law. THIS GUARANTY SHALL BE DEEMED TO HAVE BEEN
DELIVERED AT AND SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE
PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 14. Venue. GUARANTOR IRREVOCABLY CONSENTS THAT ANY LEGAL ACTION OR
PROCEEDING AGAINST IT UNDER, ARISING OUT OF OR IN ANY MANNER RELATING TO THIS
GUARANTY DOCUMENTS, MAY BE BROUGHT IN ANY COURT OF THE STATE OF NEW YORK LOCATED
IN NEW YORK, NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK. GUARANTOR, BY THE EXECUTION AND DELIVERY OF THIS GUARANTY,
EXPRESSLY AND IRREVOCABLY ASSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF
ANY OF SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING, AND FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF ANY COMPLAINT, SUMMONS, NOTICE OR OTHER PROCESS
RELATING TO SUCH ACTION OR PROCEEDING BY DELIVERY THEREOF TO IT BY HAND OR BY
MAIL IN THE MANNER PROVIDED FOR IN THIS AGREEMENT. GUARANTOR HEREBY EXPRESSLY
AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE IN ANY SUCH ACTION OR PROCEEDING
BASED ON ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS OR ANY SIMILAR BASIS. GUARANTOR SHALL NOT BE ENTITLED IN ANY SUCH
ACTION OR PROCEEDING TO ASSERT ANY DEFENSE GIVEN OR ALLOWED UNDER THE LAWS OF
ANY STATE OTHER THAN THE STATE OF NEW YORK UNLESS SUCH DEFENSE IS ALSO GIVEN OR
ALLOWED BY THE LAWS OF THE STATE OF NEW YORK. NOTHING IN THIS GUARANTY SHALL
AFFECT OR IMPAIR IN ANY MANNER OR TO ANY EXTENT THE RIGHT OF LENDERS TO COMMENCE
LEGAL PROCEEDINGS OR
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OTHERWISE PROCEED AGAINST GUARANTOR IN ANY JURISDICTION OR TO SERVE
PROCESS IN ANY MANNER PERMITTED BY LAW.
Section 15. Waiver of Jury Trial. GUARANTOR HEREBY WAIVES ANY RIGHT TO
TRIAL BY JURY WITH RESPECT TO ANY ACTION OR PROCEEDING RELATING TO THIS GUARANTY
OR ANY AGREEMENT, INSTRUMENT OR DOCUMENT EXECUTED AND DELIVERED IN CONNECTION
HEREWITH OR THEREWITH, INCLUDING THE FINANCING DOCUMENTS.
Xxxxxxx Advanced Aesthetics, Inc.
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
Title: Chief Executive Officer/Chairman
