Exhibit 10.3
UNCONDITIONAL GUARANTY
(Corporate)
For and in consideration of the loan by COMERICA BANK (“Bank”) to AURIGA
LABORATORIES, INC. (“Borrower”), which loan is made pursuant to a Loan and
Security Agreement between Borrower and Bank dated as of even date herewith, as
may be amended from time to time (the “Agreement”), and acknowledging that Bank
would not enter into the Agreement without the benefit of this Guaranty, the
undersigned guarantor (“Guarantor”) hereby unconditionally and irrevocably
guarantees the prompt and complete payment of all amounts that Borrower owes to
Bank and performance by Borrower of the Agreement and any other agreements
between Borrower and Bank, as amended from time to time (collectively referred
to as the “Agreements”), in strict accordance with their respective terms. All
terms used without definition in this Guaranty shall have the meaning assigned
to them in the Agreement.
1. If Borrower does not pay any amount or perform its obligations in strict
accordance with the Agreements, Guarantor shall immediately pay all amounts due
thereunder (including, without limitation, all principal, interest, and fees)
and otherwise to proceed to complete the same and satisfy all of Borrower’s
obligations under the Agreements.
2. If there is more than one guarantor, the obligations hereunder are joint and
several, and whether or not there is more than one guarantor, the obligations
hereunder are independent of the obligations of Borrower and any other person or
entity, and a separate action or actions may be brought and prosecuted against
Guarantor whether action is brought against Borrower or whether Borrower be
joined in any such action or actions. Guarantor waives the benefit of any
statute of limitations affecting its liability hereunder or the enforcement
thereof, to the extent permitted by law. Guarantor’s liability under this
Guaranty is not conditioned or contingent upon the genuineness, validity,
regularity or enforceability of the Agreements.
3. Guarantor authorizes Bank, without notice or demand and without affecting its
liability hereunder, from time to time to (a) renew, extend, or otherwise change
the terms of the Agreements or any part thereof; (b) take and hold security for
the payment of this Guaranty or the Agreements, and exchange, enforce, waive and
release any such security; and (c) apply such security and direct the order or
manner of sale thereof as Bank in its sole discretion may determine.
4. Guarantor waives any right to require Bank to (a) proceed against Borrower ,
any guarantor or any other person; (b) proceed against or exhaust any security
held from Borrower; or (c) pursue any other remedy in Bank’s power whatsoever.
Bank may, at its election, exercise or decline or fail to exercise any right or
remedy it may have against Borrower or any security held by Bank, including
without limitation the right to foreclose upon any such security by judicial or
nonjudicial sale, without affecting or impairing in any way the liability of
Guarantor hereunder. Guarantor waives any defense arising by reason of any
disability or other defense of Borrower or by reason of the cessation from any
cause whatsoever of the liability of Borrower. Guarantor waives any setoff,
defense or counterclaim that Borrower may have against Bank. Guarantor waives
any defense arising out of the absence, impairment or loss of any right of
reimbursement or subrogation or any other rights against Borrower. Until all of
the amounts that Borrower owes to Bank have been paid in full, Guarantor shall
have no right of subrogation or reimbursement, contribution or other rights
against Borrower, and Guarantor waives any right to enforce any remedy that Bank
now has or may hereafter have against Borrower. Guarantor waives all
presentments, demands for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor, and notices of acceptance of this
Guaranty and of the existence, creation, or incurring of new or additional
indebtedness. Guarantor assumes the responsibility for being and keeping itself
informed of the financial condition of Borrower and of all other circumstances
bearing upon the risk of nonpayment of any indebtedness or nonperformance of any
obligation of Borrower, warrants to Bank that it will keep so informed, and
agrees that absent a request for particular information by Guarantor, Bank shall
not have any duty to advise Guarantor of information known to Bank regarding
such condition or any such circumstances. Guarantor waives the benefits of
California Civil Code sections 2809, 2810, 2819, 2845, 2847, 2848, 2849, 2850,
2899 and 3433.

 

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5. Guarantor acknowledges that, to the extent Guarantor has or may have certain
rights of subrogation or reimbursement against Borrower for claims arising out
of this Guaranty, those rights may be impaired or destroyed if Bank elects to
proceed against any real property security of Borrower by non-judicial
foreclosure. That impairment or destruction could, under certain judicial cases
and based on equitable principles of estoppel, give rise to a defense by
Guarantor against its obligations under this Guaranty. Guarantor waives that
defense and any others arising from Bank’s election to pursue non-judicial
foreclosure. Without limiting the generality of the foregoing, Guarantor waives
any and all benefits and defenses under California Code of Civil Procedure
Sections 580a, 580b, 580d and 726, to the extent they are applicable.
Guarantor waives all rights and defenses arising out of an election of remedies
by Bank even though that election of remedies, such as a nonjudicial foreclosure
with respect to security for a guaranteed obligation, has destroyed the
Guarantor’s rights of subrogation and reimbursement against Borrower by the
operation of Section 580d of the Code of Civil Procedure or otherwise.
Without limiting the generality of any other waiver or other provision set forth
in this Guaranty, each undersigned Guarantor waives all rights and defenses that
any such undersigned Guarantor may have because the Indebtedness is secured by
real property. This means, among other things:
(1) Bank may collect from any undersigned Guarantor without first foreclosing on
any real or personal property collateral pledged by any Borrower to secure the
Indebtedness.
(2) If Bank forecloses on any real property collateral pledged by any Borrower
to secure the Indebtedness:
(a) the amount of the Indebtedness may be reduced only by the price for which
that collateral is sold at the foreclosure sale, even if the collateral is worth
more than the sale price.
(b) Bank may collect from any undersigned Guarantor even if Bank, by foreclosing
on the real property pledged as collateral, has destroyed any right that the
undersigned Guarantor may have to collect from Borrower.
This is an unconditional and irrevocable waiver of any rights and defenses each
undersigned Guarantor may have because the Indebtedness is secured by Real
Property. These rights and defenses include, but are not limited to, any rights
or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code
of Civil Procedure.
6. If Borrower becomes insolvent or is adjudicated bankrupt or files a petition
for reorganization, arrangement, composition or similar relief under any present
or future provision of the United States Bankruptcy Code, or if such a petition
is filed against Borrower, and in any such proceeding some or all of any
indebtedness or obligations under the Agreements are terminated or rejected or
any obligation of Borrower is modified or abrogated, or if Borrower’s
obligations are otherwise avoided for any reason, Guarantor agrees that
Guarantor’s liability hereunder shall not thereby be affected or modified and
such liability shall continue in full force and effect as if no such action or
proceeding had occurred. This Guaranty shall continue to be effective or be
reinstated, as the case may be, if any payment must be returned by Bank upon the
insolvency, bankruptcy or reorganization of Borrower, Guarantor, any other
guarantor, or otherwise, as though such payment had not been made.
7. Any indebtedness of Borrower now or hereafter held by Guarantor is hereby
subordinated to any indebtedness of Borrower to Bank; and such indebtedness of
Borrower to Guarantor shall be collected, enforced and received by Guarantor as
trustee for Bank and be paid over to Bank on account of the indebtedness of
Borrower to Bank but without reducing or affecting in any manner the liability
of Guarantor under the other provisions of this Guaranty.

 

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8. Guarantor agrees to pay reasonable attorneys’ fees and all other costs and
expenses which are incurred by Bank in the enforcement of this Guaranty. No
terms or provisions of this Guaranty may be changed, waived, revoked or amended
without the prior written consent of Bank and Guarantor. Should any provision of
this Guaranty be determined by a court of competent jurisdiction to be
unenforceable, all of the other provisions shall remain effective. This
Guaranty, together with any agreements (including without limitation any
security agreements or any pledge agreements) executed in connection with this
Guaranty, embodies the entire agreement among the parties hereto with respect to
the matters set forth herein, and supersedes all prior agreements among the
parties with respect to the matters set forth herein. No course of prior dealing
among the parties, no usage of trade, and no parol or extrinsic evidence of any
nature shall be used to supplement, modify or vary any of the terms hereof.
There are no conditions to the full effectiveness of this Guaranty. Bank may
assign this Guaranty without in any way affecting Guarantor’s liability under
it. This Guaranty shall inure to the benefit of Bank and its successors and
assigns. This Guaranty is in addition to the guaranties of any other guarantors
and any and all other guaranties of Borrower’s indebtedness or liabilities to
Bank.
9. Guarantor represents and warrants to Bank that (i) Guarantor has taken all
necessary and appropriate action to authorize the execution, delivery and
performance of this Guaranty, (ii) execution, delivery and performance of this
Guaranty do not conflict with or result in a breach of or constitute a default
under Guarantor’s Articles / Certificate of Incorporation or Bylaws or other
organizational documents or agreements to which it is party or by which it is
bound, and (iii) this Guaranty constitutes a valid and binding obligation,
enforceable against Guarantor in accordance with its terms.
10. Guarantor covenants and agrees that Guarantor shall do all of the following:
10.1 Guarantor shall maintain its corporate existence, remain in good standing
in Delaware, and continue to qualify in each jurisdiction in which the failure
to so qualify could have a material adverse effect on the financial condition,
operations or business of Guarantor. Guarantor shall maintain in force all
licenses, approvals and agreements, the loss of which could have a material
adverse effect on its financial condition, operations or business.
10.2 Guarantor shall comply with all statutes, laws, ordinances, directives,
orders, and government rules and regulations to which it is subject if
non-compliance with such laws could adversely affect the financial condition,
operations or business of Guarantor.
10.3 At any time and from time to time Guarantor shall execute and deliver such
further instruments and take such further action as may reasonably be requested
by Bank to effect the purposes of this Guaranty.
11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
This Guaranty shall be governed by, and construed in accordance with, the
internal laws of the State of California, without regard to principles of
conflicts of law. Each of Borrower and Bank hereby submits to the exclusive
jurisdiction of the state and Federal courts located in the County of Santa
Clara, State of California. THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL
BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER CERTAIN
CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW, EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER CHOICE,
KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, WAIVES ANY
RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO
THIS GUARANTY OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN THE
UNDERSIGNED PARTIES.
12. REFERENCE PROVISION.
In the event the Jury Trial Waiver set forth above is not enforceable, the
parties elect to proceed under this Judicial Reference Provision.

 

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12.1 Mechanics.
(a) With the exception of the items specified in clause (c), below, any
controversy, dispute or claim (each, a “Claim”) between the parties arising out
of or relating to this Agreement or any other document, instrument or agreement
between the undersigned parties (collectively in this Section, the “Comerica
Documents”), will be resolved by a reference proceeding in California in
accordance with the provisions of Sections 638 et seq. of the California Code of
Civil Procedure (“CCP”), or their successor sections, which shall constitute the
exclusive remedy for the resolution of any Claim, including whether the Claim is
subject to the reference proceeding. Except as otherwise provided in the
Comerica Documents, venue for the reference proceeding will be in the state or
federal court in the county or district where the real property involved in the
action, if any, is located or in the state or federal court in the county or
district where venue is otherwise appropriate under applicable law (the
“Court”).
(b) The matters that shall not be subject to a reference are the following:
(i) nonjudicial foreclosure of any security interests in real or personal
property, (ii) exercise of self-help remedies (including, without limitation,
set-off), (iii) appointment of a receiver and (iv) temporary, provisional or
ancillary remedies (including, without limitation, writs of attachment, writs of
possession, temporary restraining orders or preliminary injunctions). This
reference provision does not limit the right of any party to exercise or oppose
any of the rights and remedies described in clauses (i) and (ii) or to seek or
oppose from a court of competent jurisdiction any of the items described in
clauses (iii) and (iv). The exercise of, or opposition to, any of those items
does not waive the right of any party to a reference pursuant to this reference
provision as provided herein.
(c) The referee shall be a retired judge or justice selected by mutual written
agreement of the parties. If the parties do not agree within ten (10) days of a
written request to do so by any party, then, upon request of any party, the
referee shall be selected by the Presiding Judge of the Court (or his or her
representative). A request for appointment of a referee may be heard on an ex
parte or expedited basis, and the parties agree that irreparable harm would
result if ex parte relief is not granted. Pursuant to CCP § 170.6, each party
shall have one peremptory challenge to the referee selected by the Presiding
Judge of the Court (or his or her representative).
(d) The parties agree that time is of the essence in conducting the reference
proceedings. Accordingly, the referee shall be requested, subject to change in
the time periods specified herein for good cause shown, to (i) set the matter
for a status and trial-setting conference within fifteen (15) days after the
date of selection of the referee, (ii) if practicable, try all issues of law or
fact within one hundred twenty (120) days after the date of the conference and
(iii) report a statement of decision within twenty (20) days after the matter
has been submitted for decision.
(e) The referee will have power to expand or limit the amount and duration of
discovery. The referee may set or extend discovery deadlines or cutoffs for good
cause, including a party’s failure to provide requested discovery for any reason
whatsoever. Unless otherwise ordered based upon good cause shown, no party shall
be entitled to “priority” in conducting discovery, depositions may be taken by
either party upon seven (7) days written notice, and all other discovery shall
be responded to within fifteen (15) days after service. All disputes relating to
discovery which cannot be resolved by the parties shall be submitted to the
referee whose decision shall be final and binding.
12.2 Procedures. Except as expressly set forth herein, the referee shall
determine the manner in which the reference proceeding is conducted including
the time and place of hearings, the order of presentation of evidence, and all
other questions that arise with respect to the course of the reference
proceeding. All proceedings and hearings conducted before the referee, except
for trial, shall be conducted without a court reporter, except that when any
party so requests, a court reporter will be used at any hearing conducted before
the referee, and the referee will be provided a courtesy copy of the transcript.
The party making such a request shall have the obligation to arrange for and pay
the court reporter. Subject to the referee’s power to award costs to the
prevailing party, the parties will equally share the cost of the referee and the
court reporter at trial.

 

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12.3 Application of Law. The referee shall be required to determine all issues
in accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, enter equitable orders
that will be binding on the parties and rule on any motion which would be
authorized in a court proceeding, including without limitation motions for
summary judgment or summary adjudication. The referee shall issue a decision at
the close of the reference proceeding which disposes of all claims of the
parties that are the subject of the reference. Pursuant to CCP § 644, such
decision shall be entered by the Court as a judgment or an order in the same
manner as if the action had been tried by the Court and any such decision will
be final, binding and conclusive. The parties reserve the right to appeal from
the final judgment or order or from any appealable decision or order entered by
the referee. The parties reserve the right to findings of fact, conclusions of
laws, a written statement of decision, and the right to move for a new trial or
a different judgment, which new trial, if granted, is also to be a reference
proceeding under this provision.
12.4 Repeal. If the enabling legislation which provides for appointment of a
referee is repealed (and no successor statute is enacted), any dispute between
the parties that would otherwise be determined by reference procedure will be
resolved and determined by arbitration. The arbitration will be conducted by a
retired judge or justice, in accordance with the California Arbitration Act
§1280 through §1294.2 of the CCP as amended from time to time. The limitations
with respect to discovery set forth above shall apply to any such arbitration
proceeding.
12.5 THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS
RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY
A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL
OF ITS, HIS OR HER OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE
MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLY
TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR IN
ANY WAY RELATED TO, THIS AGREEMENT OR THE OTHER COMERICA DOCUMENTS.
IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty as of
May 18, 2007.
Guarantor- Auriga Laboratories, Inc.
By:                                                             
Name & Title: Philip S. Pesin, Chief Executive Officer

 

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CORPORATE RESOLUTIONS TO GUARANTEE
COMPANY: Auriga Laboratories, Inc.
I, the undersigned Secretary or Assistant Secretary of Auriga Laboratories, Inc.
(the “Company”), HEREBY CERTIFY that the Company is organized and existing under
and by virtue of the laws of the state of Delaware.
I FURTHER CERTIFY that attached hereto as Attachments 1 and 2 are true and
complete copies of the Certificate/Articles of Incorporation and Bylaws of the
Company, each of which is in full force and effect on the date hereof.
I FURTHER CERTIFY that a meeting of the Directors of the Company (or by other
duly authorized corporate action in lieu of a meeting), duly called and held, at
which a quorum was present and voting, the following resolutions were adopted.
BE IT RESOLVED, that any one (1) of the following named officers, employees, or
agents of this Company, whose actual signatures are shown below:

          NAMES   POSITIONS   ACTUAL SIGNATURES
 
       
Philip S. Pesin
  Chief Executive Officer    
 
       
 
       
 
       
 
       
 
       
 
       
 
       

acting for and on behalf of this Company and as its act and deed be, and they
hereby are, authorized and empowered:
Guaranty Indebtedness; Grant Security. To guaranty amounts borrowed from time to
time from Comerica Bank (“Bank”) by AURIGA LABORATORIES, INC. (“Borrower”)
including without limitation pursuant to that certain Loan and Security
Agreement between Borrower and Bank dated as of May 18, 2007, as may be amended
from time to time. To grant a security interest to Bank in the Collateral
described in the Third Party Security Agreement by and between the Company and
Bank (the “Security Agreement”), which security interest shall secure all of the
Company’s obligations, as described in that certain Unconditional Guaranty by
the Company dated as of May 18, 2007 (the “Guaranty”).
Execute Guaranty and Security Agreement. To execute the Security Agreement, the
Guaranty, and any other agreement entered into between Company and Bank in
connection therewith, all as amended or extended from time to time
(collectively, the “Secured Guaranty Documents”), and also to execute and
deliver to Bank one or more affirmations, renewals, extensions, modifications,
refinancings, consolidations, or substitutions for the Secured Guaranty
Documents, or any portion thereof.
Further Acts. In the case of lines of credit, to designate additional or
alternate individuals as being authorized to request advances thereunder, and in
all cases, to do and perform such other acts and things, to pay any and all fees
and costs, and to execute and deliver such other documents and agreements as
they may in their discretion deem reasonably necessary or proper in order to
carry into effect the provisions of these Resolutions.

 

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BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Bank may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Bank. Any such notice
shall not affect any of the Company’s agreements or commitments in effect at the
time notice is given.
I FURTHER CERTIFY that the officers, employees, and agents named above are duly
elected, appointed, or employed by or for the Company, as the case may be, and
occupy the positions set opposite their respective names; that the foregoing
Resolutions now stand of record on the books of the Company; and that the
Resolutions are in full force and effect and have not been modified or revoked
in any manner whatsoever.
IN WITNESS WHEREOF, I have hereunto set my hand on May 18, 2007 and attest that
the signatures set opposite the names listed above are their genuine signatures.
CERTIFIED TO AND ATTESTED BY:
X                                                             
The above statements are correct.
By:                                                             
Printed Name: Philip S. Pesin
Title: Chief Executive Officer
SIGNATURE OF OFFICER OR DIRECTOR
OR, IF NONE, A SHAREHOLDER OTHER
THAN SECRETARY WHEN SECRETARY IS
AUTHORIZED TO SIGN ALONE.
Failure to complete the above when the Secretary is authorized to sign alone
shall constitute a certification by the Secretary that the Secretary is the sole
Shareholder, Director and Officer of the Corporation.
Attachment 1 — Articles of Incorporation
Attachment 2 — Bylaws

 

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