GUARANTY
Exhibit 10-3
GUARANTY (the “Guaranty”),
dated as of May 7 , 2008, by Cellceutix Pharma, Inc., a Delaware
corporation with an address of 000 Xxxxxxx Xx., Xxxxx X000, Xxxxxxxxxx, XX 00000
(the “Guarantor”), in favor of Xxxxxx Partners, White Star LLC
Xxxxxx Xxxxxxxxx (the “Secured Parties”).
WHEREAS, the Guarantor is a subsidiary
or affiliate of Cellceutix Corporation (the “Borrower”); and
WHEREAS, in accordance with a certain
convertible promissory note, dated as of the date hereof (the “Note”), executed
by the Borrower, and certain related agreements between the Borrower and the
Secured Party (collectively, as amended, restated, or extended from time to
time, the “Loan Documents”), the Secured Party has agreed to loan to the
Borrower up to Four Hundered Thousand Dollars ($400,000.00)] (the “Loan”);
and
WHEREAS, the Secured Party’s
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 Party 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
Party 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 Party, 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 Loan Documents (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 Party 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 Party, 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 Party 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 Party, on demand, all
reasonable costs and expenses (including court costs and reasonable legal
expenses) incurred or expended by the Secured Party 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 Notes; 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.
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).
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 Party 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 the 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 the 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 the 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.
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 the
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 the 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 Party and be paid over to the Secured
Party 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 the 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 the 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 Party has no
further commitment to extent credit to the Borrower or (ii) the Secured Party is
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 unless received and acknowledged by an officer of the Secured Party
at its head office. No notice under (ii) above
shall affect any rights of the 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 the
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.
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 Party and their successors, transferees and
assigns. Without limiting the generality of the foregoing sentence,
the Secured Party 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
Party 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
Party. No failure on the part of the 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.
13. WAIVER
OF JURY TRIAL. THE GUARANTOR AND, BY THEIR ACCEPTANCE OF THIS GUARANTY, THE
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
THE SECURED PARTY.
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 Party, 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.
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.
|
CELLCEUTIX
PHARMA, INC.
|
|
By
/s/ Xxxxxx X. Xxxxx
Name: Xxxxxx
X. Xxxxx
Title: Chief
Executive Officer
|
