SUBSIDIARY GUARANTY
THIS
SUBSIDIARY GUARANTY
(this
“Subsidiary
Guaranty”),
dated
as of July 15, 2008, among Igia, Inc., a Delaware corporation (the “Company”),
Tactica International, Inc., a Nevada corporation; Kleenfast, Inc., a Delaware
corporation and Shopflash, Inc., a Delaware corporation (individually a
“Subsidiary
Guarantor”
and
collectively, the “Subsidiary
Guarantors”),
for
the benefit of the secured parties signatory hereto and their respective
endorsees, transferees and assigns (individually a “Secured
Party”
and
collectively, the “Secured
Parties”).
W
I T
N E S S E T H:
WHEREAS,
pursuant to a Securities Purchase Agreement, dated the date hereof, between
Company and the Secured Parties (the “Purchase
Agreement”),
Company has agreed to issue to the Secured Parties and the Secured Parties
have
agreed to purchase from Company certain of Company’s 15% Callable Secured
Convertible Notes, due three years from the date of issue (the “Notes”),
which
are convertible into shares of Company’s Common Stock, par value $.001 per share
(the “Common
Stock”).
In
connection therewith, Company shall issue the Secured Parties certain Common
Stock purchase warrants (the “Warrants”);
and
WHEREAS,
the Company and the Subsidiary Guarantors have been, and are now, engaged in
direct marketing and distribution of proprietary and branded personal care
and
home care products; and
WHEREAS,
the Subsidiary Guarantors constitute all of the subsidiaries of the Company
and
it is in the best interest of the Subsidiary Guarantors as subsidiaries of
the
Company and the indirect beneficiaries of the Purchase Agreement and Notes,
that
the Secured Parties enter into the Purchase Agreement and purchase the Notes
to
the Company; and
WHEREAS,
as a material inducement to the Secured Parties to enter into the Purchase
Agreement and Notes, the Secured Parties have required and the Subsidiary
Guarantors have agreed to unconditionally guarantee the timely and full
satisfaction of all obligations of the Company, whether matured or unmatured,
now or hereafter existing or created and becoming due and payable (the
“Obligations”)
to the
Secured Parties, their successors, endorsees, transferees or assigns under
the
Transaction Documents (as defined in the Purchase Agreement); and
WHEREAS,
in light of the foregoing, each Subsidiary Guarantor expects to derive
substantial benefit from the Purchase Agreement and sale of the Notes and the
transactions contemplated thereby and, in furtherance thereof, has agreed to
execute and deliver this Subsidiary Guaranty.
NOW,
THEREFORE, in consideration of the foregoing recitals, and the mutual covenants
contained herein, the parties hereby agree as follows:
1. Guaranty.
The
Subsidiary Guarantors, jointly and severally, hereby absolutely, unconditionally
and irrevocably guarantee to the Secured Parties, their successors, endorsees,
transferees and assigns the due and punctual performance and payment of the
Obligations owing to the Secured Parties, their successors, endorsees,
transferees or assigns when due, all at the time and place and in the amount
and
manner prescribed in, and otherwise in accordance with, the Transaction
Documents, regardless of any defense or set-off counterclaim which the Company
or any other person may have or assert, and regardless of whether or not the
Secured Parties or anyone on behalf of the Secured Parties shall have instituted
any suit, action or proceeding or exhausted its remedies or taken any steps
to
enforce any rights against the Company or any other person to compel any such
performance or observance or to collect all or part of any such amount, either
pursuant to the provisions of the Transaction Documents or at law or in equity,
and regardless of any other condition or contingency.
2. Waiver
of Demand.
The
Subsidiary Guarantors hereby unconditionally: (i) waives any requirement that
the Secured Parties, in the event of a breach in any material respect by the
Company of any of its representations or warranties in the Transaction
Documents, first make demand upon, or seek to enforce remedies against, the
Company or any other person before demanding payment of enforcement hereunder;
(ii) covenants that this Subsidiary Guaranty will not be discharged except
by
complete performance of all the Obligations; (iii) agrees that this Subsidiary
Guaranty shall remain in full force and effect without regard to, and shall
not
be affected or impaired, without limitation, by, any invalidity, irregularity
or
unenforceability in whole or in part of the Transaction Documents or any
limitation on the liability of the Company thereunder, or any limitation on
the
method or terms of payment thereunder which may now or hereafter be caused
or
imposed in any manner whatsoever; and (iv) waives diligence, presentment and
protest with respect to, and notice of default in the performance or payment
of
any Obligation by the Company under or in connection with the Transaction
Documents.
3. Absolute
Obligation.
Each
Subsidiary Guarantor acknowledges and agrees that (i) no Secured Party has
made
any representation or warranty to such Subsidiary Guarantor with respect to
the
Company, any of its subsidiaries, any Transaction Documents or any agreement,
instrument or document executed or delivered in connection therewith, or any
other matter whatsoever, and (ii) such Subsidiary Guarantor shall be liable
hereunder, and such liability shall not be affected or impaired, irrespective
of
(A) the validity or enforceability of any Transaction Documents, or any
agreement, instrument or document executed or delivered in connection therewith,
or the collectability of any of the Obligations, (B) the preference or priority
ranking with respect to any of the Obligations, (C) the existence, validity,
enforceability or perfection of any security interest or collateral security
under any Transaction Documents, or the release, exchange, substitution or
loss
or impairment of any such security interest or collateral security, (D) any
failure, delay, neglect or omission by any Secured Party to realize upon or
protect any direct or indirect collateral security, indebtedness, liability
or
obligation, any Transaction Documents, or any agreement, instrument or document
executed or delivered in connection therewith, or any of the Obligations, (E)
the existence or exercise of any right of set-off by any Secured Party, (F)
the
existence, validity or enforceability of any other guaranty with respect to
any
of the Obligations, the liability of any other person in respect of any of
the
Obligations, or the release of any such person or any other guarantor of any
of
the Obligations, (G) any act or omission of any Secured Party in connection
with
the administration of any Transaction Documents or any of the Obligations,
(H)
the bankruptcy, insolvency, reorganization or receivership of, or any other
proceeding for the relief of debtors commenced by or against, any person, (I)
the disaffirmance or rejection, or the purported disaffirmance or purported
rejection, of any of the Obligations, any Transaction Documents, or any
agreement, instrument or document executed or delivered in connection therewith,
in any bankruptcy, insolvency, reorganization or receivership, or any other
proceeding for the relief of debtor, relating to any person, (J) any law,
regulation or decree now or hereafter in effect which might in any manner affect
any of the terms or provisions of any Transaction Documents, or any agreement,
instrument or document executed or delivered in connection therewith or any
of
the Obligations, or which might cause or permit to be invoked any alteration
in
the time, amount, manner or payment or performance of any of the Company's
obligations and liabilities (including the Obligations), (K) the merger or
consolidation of the Company into or with any person, (L) the sale by the
Company of all or any part of its assets, (M) the fact that at any time and
from
time to time none of the Obligations may be outstanding or owing to any Secured
Party, (N) any amendment or modification of, or supplement to, any Transaction
Documents, or (O) any other reason or circumstance which might otherwise
constitute a defense available to or a discharge of the Company in respect
of
its obligations or liabilities (including the Obligations) or of such Subsidiary
Guarantor in respect of any of the Obligations (other than by the performance
in
full thereof).
4. Release.
The
obligations, covenants, agreements and duties of the Subsidiary Guarantors
hereunder shall not be released, affected or impaired by any assignment or
transfer, in whole or in part, of the Transaction Documents or any Obligation,
although made without notice to or the consent of the Subsidiary Guarantors,
or
any waiver by the Secured Parties, or by any other person, of the performance
or
observance by the Company or the Subsidiary Guarantors of any of the agreements,
covenants, terms or conditions contained in the Transaction Documents, or any
indulgence in or the extension of the time or renewal thereof, or the
modification or amendment (whether material or otherwise), or the voluntary
or
involuntary liquidation, sale or other disposition of all or any portion of
the
stock or assets of the Company or the Subsidiary Guarantors, or any
receivership, insolvency, bankruptcy, reorganization, or other similar
proceedings, affecting the Company or the Subsidiary Guarantors or any assets
of
the Company or the Subsidiary Guarantors, or the release of any proper from
any
security for any Obligation, or the impairment of any such property or security,
or the release or discharge of the Company or the Subsidiary Guarantors from
the
performance or observance of any agreement, covenant, term or condition
contained in or arising out of the Transaction Documents by operation of law,
or
the merger or consolidation of the Company, or any other cause, whether similar
or dissimilar to the foregoing.
5. Subrogation.
(a) Unless
and until complete performance of all the Obligations, the Subsidiary Guarantors
shall not be entitled to exercise any right of subrogation to any of the rights
of the Secured Parties against the Company or any collateral security or
guaranty held by the Secured Parties for the payment or performance of the
Obligations, nor shall the Subsidiary Guarantors seek any reimbursement from
the
Company in respect of payments made by the Subsidiary Guarantors
hereunder.
(b) In
the
extent that the Subsidiary Guarantors shall become obligated to perform or
pay
any sums hereunder, or in the event that for any reason the Company is now
or
shall hereafter become indebted to the Subsidiary Guarantors, the amount of
such
sum shall at all times be subordinate as to lien, time of payment and in all
other respects, to the amounts owing to the Secured Parties under the
Transaction Documents and the Subsidiary Guarantors shall not enforce or receive
payment thereof until all Obligations due to the Secured Parties under the
Transaction have been performed or paid. Nothing herein contained is intended
or
shall be construed to give to the Subsidiary Guarantors any right of subrogation
in or under the Transaction Documents, or any right to participate in any way
therein, or in any right, title or interest in the assets of the Secured
Parties.
6. Application
of Proceeds; Release.
The
proceeds of any sale or enforcement of or against all or any part of the cash
or
collateral at the time held by the Secured Parties hereunder, shall be applied
by the Secured Parties first to the payment of the reasonable costs of any
such
sale or enforcement, then to the payment of the principal amount or stated
valued (as applicable) of, and interest or dividends (as applicable) and any
other payments due in respect of, the Obligations. The remainder, if any, shall
be paid to the Subsidiary Guarantors. As used in this Subsidiary Guaranty,
“proceeds”
shall
mean cash, securities and other property realized in respect of.
7. Representations
and Warranties.
(a) The
Subsidiary Guarantors hereby represent and warrant to the Secured Parties
that:
(i) this
Subsidiary Guaranty constitutes a legal, valid and binding obligation of the
Subsidiary Guarantors, enforceable in accordance with its terms, except as
such
enforcement may be limited by bankruptcy, insolvency, acts of government,
governmental or regulatory agency, moratorium or other laws which may affect
creditors' rights and remedies generally and by general principles of
equity..
(ii) Except
as
set forth on Schedule
7(a),
the
execution, delivery and performance of this Subsidiary Guaranty and other
instruments contemplated herein will not violate any provision of any order
or
decree of any court or governmental instrumentality or of any mortgage,
indenture, contract or other agreement to which the Subsidiary Guarantors are
a
party or by which the Subsidiary Guarantors may be bound, and will not result
in
the creation or imposition of any lien, charge or encumbrance on, or security
interest in, any of the Subsidiary Guarantors’ properties pursuant to the
provisions of such mortgage, indenture, contract or other
agreement.
(iii) all
representations and warranties relating to it contained in the Purchase
Agreement are true and correct.
(b) The
Company represents and warrants to the Secured Parties that it has no knowledge
that any of the representations or warranties of the Subsidiary Guarantors
herein are incorrect or false in any material respect.
8. No
Waiver; No Election of Remedies.
No
failure on the part of the Secured Parties to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Secured Parties of
any
right, power or remedy preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The remedies herein provided
are
cumulative and are not exclusive of any remedies provided by law. In addition,
the exercise of any right or remedy of the Secured Parties at law or equity
or
under this Subsidiary Guaranty or any of the documents shall not be deemed
to be
an election of Pledgee’s rights or remedies under such documents or at law or
equity.
9. Termination.
This
Subsidiary Guaranty shall terminate on the date on which all Obligations have
been performed, satisfied, paid or discharged in full.
10. Further
Assurances.
The
parties hereto agree that, from time to time upon the written request of any
party hereto, they will execute and deliver such further documents and do such
other acts and things as such party may reasonably request in order fully to
effect the purposes of this Subsidiary Guaranty.
11. Miscellaneous.
(a) Payment
of Fees.
The
Subsidiary Guarantors and the Company jointly and severally agree to pay all
costs including all reasonable attorneys’ fees and disbursements incurred by the
Secured Parties in enforcing this Subsidiary Guaranty in accordance with its
terms.
(b) Modification.
This
Subsidiary Guaranty contains the entire understanding between the parties with
respect to the subject matter hereof and specifically incorporates all prior
oral and written agreements relating to the subject matter hereof. No portion
or
provision of this Subsidiary Guaranty may be changed, modified, amended, waived,
supplemented, discharged, canceled or terminated orally or by any course of
dealing, or in any manner other than by an agreement in writing, signed by
the
party to be charged.
(c) Notice.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile telephone number specified in this
Section prior to 6:30 p.m. (New York City time) on a Business Day (as defined
in
the Purchase Agreement), (ii) the Business Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Subsidiary Guaranty later than 6:30 p.m.
(New
York City time) on any date and earlier than 11:59 p.m. (New York City time)
on
such date, (iii) the Business Day following the date of mailing, if sent by
nationally recognized overnight courier services, or (iv) upon actual receipt
by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as follows:
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If
to the Company:
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Xxxxx
000
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0000-X
0xx
Xxxxxx
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Xxx
Xxxx, XX 00000
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Attention:
President
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Telephone:
(000) 000-0000
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Facsimile:
_____________
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With
copies to:
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Xxxxxx
Xxxxx Xxxxxx & Xxxxx, LLP
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000
Xxxxxxx Xxxxxx
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Xxx
Xxxx, XX 00000
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Attention:
Xxxxx X. Xxxxxxxxxx
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Telephone:
(000) 000-0000
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Facsimile:
(000) 000-0000
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If
to the Subsidiary Guarantors:
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Tactica
International, Inc.
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Xxxxx
000
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0000-X
0xx
Xxxxxx
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Xxx
Xxxx, XX 00000
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Attention:
President
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Telephone:
(000) 000-0000
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Facsimile:
____________
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Kleenfast,
Inc.
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Xxxxx
000
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0000-X
0xx
Xxxxxx
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Xxx
Xxxx, XX 00000
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Attention:
President
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Telephone:
(000) 000-0000
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Facsimile:
____________
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Shopflash,
Inc.
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Xxxxx
000
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0000-X
0xx
Xxxxxx
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Xxx
Xxxx, XX 00000
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Attention:
President
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Telephone:
(000) 000-0000
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Facsimile:
____________
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If
to the Secured Parties:
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AJW
Partners, LLC
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New
Millennium Capital Partners II, LLC
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AJW
Master Fund, Ltd.
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0000
Xxxxxxxx Xxxxxxxxx
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Xxxxx
000
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Xxxxxx,
Xxx Xxxx 00000
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Attention:
Xxxxx Xxxxxxxx
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Facsimile:
000-000-0000
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With
copies to:
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Xxxxxxx
Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
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0000
Xxxxxx Xxxxxx
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00xx
Xxxxx
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Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000
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Attention:
Xxxxxx X. Xxxxxxxx, Esq.
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Telephone:
000-000-0000
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Facsimile: 000-000-0000
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(d) Invalidity.
If any
part of this Subsidiary Guaranty is contrary to, prohibited by, or deemed
invalid under applicable laws or regulations, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall
be
given effect so far as possible.
(e) Benefit
of Agreement.
This
Subsidiary Guaranty shall be binding upon and inure to the parties hereto and
their respective successors and assigns.
(f) Mutual
Agreement.
This
Subsidiary Guaranty embodies the arm’s length negotiation and mutual agreement
between the parties hereto and shall not be construed against either party
as
having been drafted by it.
(g) New
York Law to Govern.
This
Subsidiary Guaranty shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York without regard to
the
principals of conflicts of law thereof. Each party hereby irrevocably submits
to
the exclusive jurisdiction of the state and Federal courts sitting in the city
of New York, borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in
any
suit, action or proceeding, any claim that it is not personally subject to
the
jurisdiction of any such court or that such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to
it
under this agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein
shall
be deemed to limit in any way any right to serve process in any manner permitted
by law.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the parties hereto have caused this Guaranty and Pledge
Agreement to be duly executed by their respective authorized persons as of
the
date first indicated above.
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COMPANY
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| By: |
/s/ Xxxx
Xxxxxxxxxxx
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Xxxx
Xxxxxxxxxxx
President
and Treasurer
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SUBSIDIARY
GUARANTORS:
TACTICA
INTERNATIONAL,
INC.
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| By: |
/s/ Xxxx
Xxxxxxxxxxx
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Xxxx
Xxxxxxxxxxx
President
and Treasurer
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KLEENFAST,
INC.
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| By: |
/s/ Xxxx
Xxxxxxxxxxx
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Xxxx
Xxxxxxxxxxx
President
and Treasurer
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SHOPFLASH,
INC.
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| By: |
/s/ Xxxx
Xxxxxxxxxxx
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Xxxx
Xxxxxxxxxxx
President
and
Treasurer
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SECURED
PARTIES:
AJW
PARTNERS, LLC
By:
SMS Group, LLC
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| By: |
/s/ Xxxxx
X. Xxxxxxxx
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Xxxxx
X. Xxxxxxxx
Manager
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AJW
MASTER FUND, XXX. Xx:
First Street Manager II,
LLC |
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| By: |
/s/ Xxxxx
X. Xxxxxxxx
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Xxxxx
X. Xxxxxxxx
Manager
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NEW
MILLENNIUM CAPITAL PARTNERS II, LLC
By:
First Street Manager II,
LLC
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| By: |
/s/ Xxxxx
X. Xxxxxxxx
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Xxxxx
X. Xxxxxxxx
Manager
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