Exhibit 10.5
CORPORATE GUARANTY
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This CORPORATE GUARANTY (this "GUARANTY"), is made this __ day of
November, 2007, by the entities listed on Schedule I, individually and
collectively, jointly and severally, the "GUARANTOR") in favor of and for the
benefit and security of _______________________, having a mailing address at
__________________ (the "SECURED PARTY").
WHEREAS, pursuant to a Subscription Agreement, dated the date hereof,
between HC Innovations, Inc. (the "Company") and the Secured Party (the
"PURCHASE AGREEMENT"), the Company has agreed to issue to the Secured Party and
the Secured Party has agreed to purchase from the Company (i) Twelve-Month 10%
Secured Convertible Notes, (the "NOTES"), which are convertible into shares of
Company's Common Stock, par value $0.001 per share (the "COMMON STOCK"); and
(ii) Common Stock purchase warrants (the "WARRANTS"); and
WHEREAS, each Guarantor is desirous of having the Secured Party make a
loan to the Company, and the Secured Party has required that each Guarantor
execute and deliver this Guaranty to the Secured Party, as a condition to the
loan made by the Secured Party; and
WHEREAS, the loan made, as aforesaid, by the Secured Party is necessary
and desirable to the conduct and operation of the business of the Company, and
each Guarantor will derive substantial benefits from the credit made available
to the Company pursuant to the Notes;
NOW, THEREFORE, for value received and in consideration of any loan,
advance, or financial accommodation of any kind whatsoever heretofore, now or
hereafter made, given or granted to the Company by the Secured Party, each
Guarantor agrees as follows:
1. Each Guarantor, jointly and severally, unconditionally
guaranties (i) the full and prompt payment and performance, when due, whether at
maturity or earlier, by reason of acceleration or otherwise, and at all times
thereafter, of all of the indebtedness, liabilities and obligations of every
kind and nature of the Company to the Secured Party or any parent, affiliate or
subsidiary of the Secured Party (the terms "Secured Party" as used hereafter
shall include such parents, affiliates and subsidiaries), howsoever created,
arising or evidenced, whether direct or indirect, absolute or contingent, joint
or several, now or hereafter existing, or due or to become due, and howsoever
owned, held or acquired by the Secured Party, whether through discount,
overdraft, purchase, direct loan or as collateral or otherwise, including,
without limitation, all obligations and liabilities of the Company to the
Secured Party under the Notes, and (ii) the prompt, full and faithful discharge
by the Company of each and every term, condition, agreement, representation and
warranty now or hereafter made by the Company to Secured Party (all such
indebtedness, liabilities and obligations being hereinafter collectively
referred to as the "LIABILITIES"). Guarantor further agrees to pay all costs and
expenses, including, without limitation, all court costs and reasonable
attorneys' and paralegals' fees paid or incurred by Secured Party in endeavoring
to collect all or any part of the Liabilities from, or in prosecuting any action
against, Guarantor. All amounts payable by Guarantor under this Guaranty shall
be payable by Guarantor upon demand by Secured Party.
2. Notwithstanding any provision of this Guaranty to the
contrary, it is intended that this Guaranty, and any liens and security
interests granted by Guarantor to secure this Guaranty, not constitute a
"Fraudulent Conveyance" (as defined below). Consequently, Guarantor agrees that
if this Guaranty, or any liens or security interests securing this Guaranty,
would, but for the application of this sentence, constitute a Fraudulent
Conveyance, this Guaranty and each such lien and security interest shall be
valid and enforceable only to the maximum extent that would not cause this
Guaranty or such lien or security interest to constitute a Fraudulent
Conveyance, and this Guaranty shall automatically be deemed to have been amended
accordingly at all relevant times. For purposes hereof, "FRAUDULENT CONVEYANCE"
means a fraudulent conveyance under Section 548 of the "Bankruptcy Code" (as
hereinafter defined) or a fraudulent conveyance or fraudulent transfer under the
provisions of any applicable fraudulent conveyance or fraudulent transfer law or
similar law of any state, nation or other governmental unit, as in effect from
time to time.
3. Each Guarantor hereby agrees that this Guaranty is a guaranty
of payment and performance and not of collection, and that, except as
hereinafter provided, its obligations under this Guaranty shall be
unconditional, irrespective of (i) the validity or enforceability of the
Liabilities or any part thereof, or of any promissory note or other document
evidencing all or any part of the Liabilities, (ii) the absence of any attempt
to collect Liabilities from the Company or any other guarantor or other action
to enforce the same, (iii) the waiver or consent by Secured Party with respect
to any provision of any instrument evidencing Liabilities, or any part thereof,
or any other agreement heretofore, now or hereafter executed by Company and
delivered to Secured Party, (iv) failure by Secured Party to take any steps to
perfect and maintain its security interest in, or to preserve its rights to, any
security or collateral for Liabilities, (v) the institution of any proceeding
under Chapter 11 of Title 11 of the United States Code (11 U.S.C. ss.101 et
seq.), as amended (the "BANKRUPTCY CODE") or any similar or analogous statutory
or nonstatutory proceedings under any other law, whether state, provincial or
federal, now existing or hereafter existing for relief of the debtors, by or
against Company, (vi) Secured Party's election in any such proceeding of the
application of Section 1111(b)(2) of the Bankruptcy Code, (vii) any borrowing or
grant of a security interest by Company as debtor-in-possession, under Section
364 of the Bankruptcy Code, (viii) the disallowance, under Section 502 of the
Bankruptcy Code, of all or any portion of Secured Party's claim(s) for repayment
of Liabilities, or (ix) any other circumstance which might otherwise constitute
a legal or equitable discharge or defense of a guarantor.
4. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of receivership, insolvency
or bankruptcy of the Company, protest or notice with respect to Liabilities and
all demands whatsoever, and covenants that this Guaranty will not be discharged,
except by complete performance of the obligations and liabilities contained
herein. Upon any default by the Company as provided in any instrument or
document evidencing all or any part of Liabilities, including, without
limitation, the Notes, Secured Party may, at its sole election, proceed directly
and at once, without notice, against any Guarantor to collect and recover the
full amount or any portion of Liabilities, without first proceeding against the
Company, or any other person, firm, or corporation, or against any security or
collateral for Liabilities.
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5. Secured Party is hereby authorized, without notice or demand
and without affecting the liability of any Guarantor, to at any time and from
time to time (i) renew, extend, accelerate or otherwise change the time for
payment of, or other terms relating to, Liabilities or otherwise modify, amend
or change the terms of any promissory note or other agreement, document or
instrument now or hereafter executed by the Company and delivered to Secured
Party; (ii) accept partial payments on Liabilities; (iii) take and hold security
or collateral for the payment of Liabilities guaranteed hereby, or for the
payment of this Guaranty, or for the payment of any other guaranties of
Liabilities or other liabilities of the Company, and exchange, enforce, waive
and release any such security or collateral; (iv) apply such security or
collateral and direct the order or manner of sale thereof as in its sole
discretion it may determine; and (v) settle, release, compromise, collect or
otherwise liquidate Liabilities and any security or collateral therefor in any
manner, without affecting or impairing the obligations of any Guarantor
hereunder. Secured Party shall have the exclusive right to determine the time
and manner of application of any payments or credits, whether received from the
Company or any other source, and such determination shall be binding on each
Guarantor. All such payments and credits may be applied, reversed and reapplied,
in whole or in part, to any of the Liabilities as Secured Party shall determine
in its sole discretion without affecting the validity or enforceability of this
Guaranty.
6. To secure the payment and performance of the Liabilities,
including the obligations and liabilities contained herein, each Guarantor has
granted to Secured Party a security interest pursuant to a Security Agreement
dated as of even date herewith among the Company, each Guarantor and Secured
Party (the "Security Agreement") in all property of Guarantor. Guarantor agrees
that Secured Party shall have the rights and remedies of a secured party under
the UCC (as defined in the Security Agreement), as now existing or hereafter
amended, with respect to all of the aforesaid property, including without
limitation thereof, the right to sell or otherwise dispose of any or all of such
property and apply the proceeds of such sale to the payment of Liabilities. In
addition, Secured Party may, in its sole discretion, without notice to Guarantor
and regardless of the acceptance of any security or collateral for the payment
hereof, appropriate and apply toward the payment of Liabilities (i) any
indebtedness due or to become due from Secured Party to Guarantor, and (ii) any
moneys, credits or other property belonging to Guarantor, at any time held by or
coming into the possession of Secured Party, whether for deposit or otherwise.
7. Each Guarantor hereby assumes responsibility for keeping
itself informed of the financial condition of the Company, and any and all
endorsers and/or other guarantors of any instrument or document evidencing all
or any part of Liabilities and of all other circumstances bearing upon the risk
of nonpayment of Liabilities or any part thereof that diligent inquiry would
reveal, and each Guarantor hereby agrees that Secured Party shall not have any
duty to advise Guarantor of information known to Secured Party regarding such
condition or any such circumstances or to undertake any investigation not a part
of its regular business routine. If Secured Party, in its sole discretion,
undertakes at any time or from time to time to provide any such information to
any Guarantor, Secured Party shall be under no obligation to update any such
information or to provide any such information to Guarantor on any subsequent
occasion.
8. Each Guarantor consents and agrees that Secured Party shall be
under no obligation to marshal any assets in favor of Guarantor or against or in
payment of any or all of
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Liabilities. Each Guarantor further agrees that, to the extent that the Company
make a payment or payments to Secured Party, or Secured Party receives any
proceeds of collateral, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to the Company, its estate, trustee, receiver or
any other party, including, without limitation, Guarantor, under any bankruptcy
law, state, provincial or federal law, common law or equitable theory, then to
the extent of such payment or repayment, Liabilities or the part thereof which
has been paid, reduced or satisfied by such amount, and Guarantor's obligations
hereunder with respect to such portion of Liabilities, shall be reinstated and
continued in full force and effect as of the date such initial payment,
reduction or satisfaction occurred.
9. Each Guarantor agrees that any and all claims of any Guarantor
against the Company, any endorser or any other guarantor of all or any part of
Liabilities, or against Company's properties, whether arising by reason of any
payment by any Guarantor to Secured Party pursuant to the provisions hereof, or
otherwise, shall be subordinate and subject in right of payment to the prior
payment, in full, of all of Liabilities.
10. Secured Party may, without notice to anyone, sell or assign
Liabilities or any part thereof, or grant participations therein, and in any
such event each and every immediate or remote assignee or holder of, or
participant in, all or any of Liabilities shall have the right to enforce this
Guaranty, by suit or otherwise for the benefit of such assignee, holder, or
participant, as fully as if herein by name specifically given such right, but
Secured Party shall have an unimpaired right, prior and superior to that of any
such assignee, holder or participant, to enforce this Guaranty for the benefit
of Secured Party, as to any part of Liabilities retained by Secured Party.
11. This Guaranty shall be binding upon Guarantor and upon the
successors (including without limitation, any receiver, trustee or debtor in
possession of or for Guarantor) of Guarantor and shall inure to the benefit of
Secured Party and its respective successors and assigns. Guarantor hereby
represents and warrants that it has all necessary corporate authority to execute
and deliver this Guaranty and to perform its obligations hereunder.
12. This Guaranty shall continue in full force and effect, and
Secured Party shall be entitled to make loans and advances and extend financial
accommodations to the Company on the faith hereof until such time as Secured
Party has, in writing, notified Guarantor that all of Liabilities have been paid
in full and discharged or until Secured Party has actually received written
notice from Guarantor of the discontinuance of this Guaranty, or written notice
of the dissolution of Guarantor. In case of any discontinuance by, or
dissolution of, Guarantor (collectively, a "TERMINATION EVENT"), this Guaranty
and the obligations of Guarantor and its successors or assigns, as the case may
be, shall remain in full force and effect with respect to all of Liabilities
incurred prior to the receipt by Secured Party of written notice of the
Termination Event.
13. Wherever possible each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Guaranty shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent
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of such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
14. THIS GUARANTY SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL
LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO ITS CONFLICTS OF LAW
PRINCIPLES.
15. Each Guarantor irrevocably agrees that, subject to Secured
Party's sole and absolute election, all disputes arising under this Guaranty
will be submitted to arbitration in Boston, Massachusetts before a single
arbitrator of the American Arbitration Association ("AAA"). The arbitrator shall
be selected by application of the rules of the AAA, or by mutual agreement of
the parties, except that such arbitrator shall be an attorney admitted to
practice law in the State of New York. No party to this agreement will challenge
the jurisdiction or venue provisions as provided in this section. Nothing in
this section shall limit the Secured Party's right to obtain an injunction for a
breach of this Guaranty from a court of law.
16. TERMINATION. This Agreement shall terminate on the date on
which all Liabilities have been satisfied, performed, paid or discharged in
full.
[Signature Page Follows]
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IN WITNESS WHEREOF, this Guaranty has been duly executed by the
undersigned as of this ____ day of November, 2007.
GUARANTOR:
By:
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Print Name:
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Title:
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By:
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Title:
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By:
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ACKNOWLEDGMENT OF SIGNATURES
STATE OF ___________________________________}
} SS
COUNTY OF __________________________________}
I, ___________________________, a Notary Public in and for the state
and county aforesaid, so hereby certify that before me this day personally
appeared _______________________, known to me to be the same person whose name
is subscribed to the foregoing Secured Continuing Unconditional Guaranty and
known to me to be the _____________________________ of the corporation that
executed the foregoing Secured Continuing Unconditional Guaranty, and
acknowledged to me that he executed and delivered the foregoing consent as his
free and voluntary act, for the uses set forth therein.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal this
______ day of November, 2007.
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Notary Public
My Commission Expires: _____________
ACKNOWLEDGMENT OF SIGNATURES
STATE OF ___________________________________}
} SS
COUNTY OF __________________________________}
I, ___________________________, a Notary Public in and for the state
and county aforesaid, so hereby certify that before me this day personally
appeared _______________________, known to me to be the same person whose name
is subscribed to the foregoing Secured Continuing Unconditional Guaranty and
known to me to be the _____________________________ of the corporation that
executed the foregoing Secured Continuing Unconditional Guaranty, and
acknowledged to me that he executed and delivered the foregoing consent as his
free and voluntary act, for the uses set forth therein.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal this
______ day of November, 2007.
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Notary Public
My Commission Expires: _____________
