GUARANTY AND PLEDGE AGREEMENT
EXHIBIT
10.29
GUARANTY
AND PLEDGE AGREEMENT
(this
“Agreement”),
dated
as of June 30, 2005, among FemOne, Inc., a Nevada corporation (the “Company”),
Xxx
Xxxxx, Xx. (the “Pledgor”),
and
the pledgees signatory hereto and their respective endorsees, transferees and
assigns (collectively, the “Pledgees”).
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 Pledgees (the “Purchase
Agreement”),
Company has agreed to issue to the Pledgees and the Pledgees have agreed to
purchase from Company certain of Company’s 8% 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 Pledgees certain Common Stock
purchase warrants (the “Warrants”);
and
WHEREAS,
as a material inducement to the Pledgees to enter into the Purchase Agreement,
the Pledgees have required and the Pledgor has agreed (i) 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
Pledgees, their successors, endorsees, transferees or assigns under the
Transaction Documents (as defined in the Purchase Agreement) to the extent
of
the Collateral (as defined in Section 5 hereof), and (ii) to grant to the
Pledgees, their successors, endorsees, transferees or assigns a security
interest in the number of shares of Common Stock currently owned by the Pledgor
as set forth below the Pledgor’s signature on the signature page hereto
(collectively, the “Shares”),
as
collateral security for the Obligations, such Shares having been already pledged
by the Pledgor to the Pledgees, pursuant to the Guaranty and Pledge Agreement,
dated as of July 23, 2004, by and among the same parties hereto, as security
for
the timely and full satisfaction of the obligations of the Company due and
payable to the Pledgees pursuant to prior financing documents by and between
the
Company and the Pledgees. Terms used and not defined herein shall have the
meaning ascribed to them in the Purchase Agreement.
NOW,
THEREFORE, in consideration of the foregoing recitals, and the mutual covenants
contained herein, the parties hereby agree as follows:
1. Guaranty.
To the
extent of the Collateral, the Pledgor hereby absolutely, unconditionally and
irrevocably guarantees to the Pledgees, their successors, endorsees, transferees
and assigns the due and punctual performance and payment of the Obligations
owing to the Pledgees, 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 Pledgees or anyone on behalf
of
the Pledgees 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. The Pledgor shall have no obligation whatsoever to the Pledgees
beyond the Collateral pledged for the Obligations set forth herein.
2. Waiver
of Demand.
The
Pledgor hereby unconditionally: (i) waives any requirement that the Pledgees,
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
Agreement will not be discharged except by complete performance of all the
Obligations to the extent of the Collateral; (iii) agrees that this Agreement
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. Release.
The
obligations, covenants, agreements and duties of the Pledgor 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 Pledgor, or any waiver by the Pledgees, or
by
any other person, of the performance or observance by the Company or the Pledgor
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
Pledgor, or any receivership, insolvency, bankruptcy, reorganization, or other
similar proceedings, affecting the Company or the Pledgor or any assets of
the
Company or the Pledgor, or the release of any property 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 Pledgor 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.
4. Subrogation.
(a) Unless
and until complete performance of all the Obligations to the extent of the
Collateral, the Pledgor shall not be entitled to exercise any right of
subrogation to any of the rights of the Pledgees against the Company or any
collateral security or guaranty held by the Pledgees for the payment or
performance of the Obligations, nor shall the Pledgor seek any reimbursement
from the Company in respect of payments made by the Pledgor
hereunder.
(b) In
the
event that the Pledgor 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 Pledgor, 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 Pledgees under the Transaction Documents, and the
Pledgor shall not enforce or receive payment thereof until all Obligations
due
to the Pledgees under the Transaction have been performed or paid. Nothing
herein contained is intended or shall be construed to give to the Pledgor 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 Pledgees.
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5. Security.
As
collateral security for the punctual payment and performance, when due, by
the
Company of all the Obligations, the Pledgor hereby pledges with, hypothecates,
transfers and assigns to the Pledgees all of the Shares and all proceeds, shares
and other securities received, receivable or otherwise distributed in respect
of
or in exchange for the Shares, including, without limitation, any shares and
other securities into which such Shares may be convertible or exchangeable
(collectively, the “Additional
Collateral”
and
together with the Shares, the “Collateral”).
Within five (5) days from the date of this Agreement, the Pledgor shall deliver
to the Pledgees the certificate(s) representing the Shares, stamped with a
bank
medallion guarantee, along with a stock transfer power duly executed in blank
by
the Pledgor, to be held by the Pledgees as security. Any Collateral received
by
the Pledgor on or after the date hereof shall be immediately delivered to the
Pledgees together with any executed stock powers or other transfer documents
requested by the Pledgees, which request may be made at any time prior to the
date when the Obligations shall have been paid and otherwise satisfied in
full.
6. Voting
Power, Dividends, Etc. and other Agreements.
(a) Unless
and until an Event of Default (as set forth in Section 7 hereof) has occurred,
the Pledgor shall be entitled to:
(i) Exercise
all voting and/or consensual powers pertaining to the Collateral, or any part
thereof, for all purposes;
(ii) Receive
and retain dividends paid with respect to the Collateral; and
(iii) Receive
the benefits of any income tax deductions available to the Pledgor as a
shareholder of the Company.
(b) The
Pledgor agrees that it will not sell, assign, transfer, pledge, hypothecate,
encumber or otherwise dispose of the Collateral unless and until it is released
by the Pledgees pursuant hereto.
(c) The
Pledgor and the Company jointly and severally agree to pay all costs including
all reasonable attorneys’ fees and disbursements incurred by the Pledgees in
enforcing this Agreement in accordance with its terms.
7. Default
and Remedies.
(a) For
the
purposes of this Agreement, “Event
of Default”
shall
mean:
(i) default
in or under any of the Obligations after the expiration, without cure or waiver,
of any applicable cure period;
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(ii) a
breach
in any material respect by the Company of any of its representations or
warranties in the Transaction Documents; or
(iii) a
breach
in any material respect by the Pledgor of any of its representations or
warranties in this Agreement.
(b) the
Pledgees shall have the following rights upon any Event of Default:
(i) the
rights and remedies provided by the Uniform Commercial Code as adopted by the
State of New York (the “UCC”)
(as
said law may at any time be amended);
(ii) the
right
to receive and retain all dividends, payments and other distributions of any
kind upon any or all of the Collateral;
(iii) the
right
to cause any or all of the Collateral to be transferred to its own name or
to
the name of its designee and have such transfer recorded in any place or places
deemed appropriate by the Pledgees; and
(iv) the
right
to sell, at a public or private sale, the Collateral or any part thereof for
cash, upon credit or for future delivery, and at such price or prices in
accordance with the UCC (as such law may be amended from time to time). Upon
any
such sale the Pledgees shall have the right to deliver, assign and transfer
to
the purchaser thereof the Collateral so sold. The Pledgees shall give the
Pledgor not less than ten (10) days’ written notice of its intention to make any
such sale. Any such sale, shall be held at such time or times during ordinary
business hours and at such place or places as the Pledgees may fix in the notice
of such sale. The Pledgees may adjourn or cancel any sale or cause the same
to
be adjourned from time to time by announcement at the time and place fixed
for
the sale, and such sale may be made at any time or place to which the same
may
be so adjourned. In case of any sale of all or any part of the Collateral upon
terms calling for payments in the future, any Collateral so sold may be retained
by the Pledgees until the selling price is paid by the purchaser thereof, but
the Pledgees shall incur no liability in the case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in the case of
such
failure, such Collateral may again be sold upon like notice. The Pledgees,
however, instead of exercising the power of sale herein conferred upon them,
may
proceed by a suit or suits at law or in equity to foreclose the security
interest and sell the Collateral, or any portion thereof, under a judgment
or
decree of a court or courts of competent jurisdiction, the Pledgor having been
given due notice of all such action. The Pledgees shall incur no liability
as a
result of a sale of the Collateral or any part thereof. All proceeds of any
such
sale, after deducting the reasonable expenses and reasonable attorneys’ fees
incurred in connection with such sale, shall be applied in reduction of the
Obligations, and the remainder, if any, shall be paid to the
Pledgor.
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8. Application
of Proceeds; Release.
The
proceeds of any sale or enforcement of or against all or any part of the
Collateral, and any other cash or collateral at the time held by the Pledgees
hereunder, shall be applied by the Pledgees first to the payment of the
reasonable costs of any such sale or enforcement, then to reimburse the Pledgees
for any damages, costs or expenses incurred by the Pledgees as a result of
an
Event of Default, 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 Pledgor. As used in this Agreement, “proceeds”
shall
mean cash, securities and other property realized in respect of, and
distributions in kind of, the Collateral, including any thereof received under
any reorganization, liquidation or adjustment of debt of any issuer of
securities included in the Collateral.
9. Representations
and Warranties.
(a) The
Pledgor hereby represents and warrants to the Pledgees that:
(i) the
Pledgor has full power and authority and legal right to pledge the Collateral
to
the Pledgees pursuant to this Agreement and this Agreement constitutes a legal,
valid and binding obligation of the Pledgor, enforceable in accordance with
its
terms.
(ii) the
execution, delivery and performance of this Agreement 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 Pledgor is a party or by which the Pledgor and
the
Collateral 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
Pledgor’s properties pursuant to the provisions of such mortgage, indenture,
contract or other agreement.
(iii) the
Pledgor is the sole record and beneficial owner of all of the Shares;
and
(iv) the
Pledgor owns the Collateral free and clear of all Liens.
(b) The
Company represents and warrants to the Pledgees that:
(i) it
has no
knowledge that any of the representations or warranties of the Pledgor herein
are incorrect or false in any material respect;
(ii) all
of
the Shares were validly issued, fully paid and non-assessable; and
(iii) the
Pledgor is the record holder of the Shares.
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10. No
Waiver; No Election of Remedies.
No
failure on the part of the Pledgees 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 Pledgees 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 Pledgees at law or equity or under this Agreement 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.
11. Termination.
This
Agreement shall terminate on the date on which all Obligations have been
performed, satisfied, paid or discharged in full.
12. 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 Agreement. The Pledgees acknowledge that they are
aware that Pledgor shall have no obligations whatsoever to the Pledgees beyond
the Collateral pledged for the Obligations set forth herein, and no request
for
further assurance may or shall increase such Obligations.
13. Miscellaneous.
(a) Modification.
This
Agreement 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 Agreement 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.
(b) 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 Agreement 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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FemOne,
Inc.
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0000
Xxxxxxx Xxxxxxx, Xxxxx 000
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Xxxxxxxx,
Xxxxxxxxxx 00000
|
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Attention:
Chief Executive Officer
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Telephone:
(000) 000-0000
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Facsimile:
(000) 000-0000
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With
copies to:
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August
Law Group, P.C.
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The
Atrium
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00000
Xxx Xxxxxx Xxxxxx, Xxxxx 000
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Xxxxxx,
Xxxxxxxxxx 00000
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Attention:
Xxxxxxx X. August, Esq.
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Telephone:
(000) 000-0000
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Facsimile:
(000) 000-0000
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If
to the Secured Party:
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AJW
Partners, LLC
|
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AJW
Offshore, Ltd.
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AJW
Qualified Partners, LLC
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New
Millennium Capital Partners II, LLC
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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 & Ingersoll, LLP
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0000
Xxxxxx Xxxxxx, 00xx
Xxxxx
|
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Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000
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Attention:
Xxxxxx X. Xxxxxxxx, Esquire
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Facsimile:
000-000-0000
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(c) Invalidity.
If any
part of this Agreement 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.
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(d) Benefit
of Agreement.
This
Agreement shall be binding upon and inure to the parties hereto and their
respective successors and assigns.
(e) Mutual
Agreement.
This
Agreement 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.
(f) New
York Law to Govern.
This
Agreement 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]
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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.
FEMONE,
INC.
By:
/s/ Xxx X. Xxxxx,
Xx.
Xxx
X.
Xxxxx, Xx.
Chief
Executive Officer
AJW
PARTNERS, LLC
By:
SMS
Group, LLC
By:
Xxxxx
X.
Xxxxxxxx
Manager
AJW
OFFSHORE, LTD.
By:
First
Street Manager II, LLC
By:
Xxxxx
X.
Xxxxxxxx
Manager
AJW
QUALIFIED PARTNERS, LLC
By:
AJW
Manager, LLC
By:
Xxxxx
X.
Xxxxxxxx
Manager
NEW
MILLENNIUM CAPITAL
PARTNERS,
II, LLC
By:
First
Street Manager II, LLC
By:
Xxxxx
X.
Xxxxxxxx
Manager
[Signatures
Continued on Following Page]
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Pledgor:
/s/
Xxx X. Xxxxx,
Xx.
Xxx
X.
Xxxxx, Xx.
Number
of
Shares subject to this pledge: 4,923,845
Date
such
Shares were acquired: September 1, 2003
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