Filed by Bowne Pure Compliance



 




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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