Exhibit 10.5
GUARANTEE
AGREEMENT
GUARANTEE AGREEMENT (as amended,
supplemented or otherwise modified from time to time, the “
Guarantee Agreement ”), dated as of January 12,
2007, among Synova Healthcare Group, Inc., a Nevada corporation
(the “ Company ”), Synova Healthcare, Inc., a
Delaware corporation (“ Synova Healthcare ”),
Synova Pre-Natal Healthcare, Inc., a Delaware corporation (“
Synova Pre-Natal ”), each Subsidiary of the Company
which becomes a party hereto in accordance with Article 14 ,
(each such Subsidiary together with Synova Healthcare and Synova
Pre-Natal, collectively, the “ Guarantors ”, and
each individually, a “ Guarantor ”), and the
purchasers signatory hereto (each purchaser including their
respective successors, endorsees, transferees and assigns, a
“ Purchaser ”, and collectively, the “
Purchasers ”).
Reference is made to the Purchase
Agreement, dated as of January 12, 2007, among the Company,
the Guarantors and the Purchasers (as amended, supplemented or
otherwise modified from time to time, the “ Purchase
Agreement ”). Capitalized terms used herein and not
defined herein shall have the meanings assigned to such terms in
the Purchase Agreement.
The Purchasers have agreed to
purchase certain securities of the Company pursuant to, and upon
the terms and subject to the conditions specified in, the Purchase
Agreement. Each Guarantor acknowledges that (i) it will derive
substantial benefit from the transactions as contemplated by the
Transaction Documents and (ii) the execution and delivery by
the Guarantors and the Company of this Guarantee Agreement is a
condition precedent to the effectiveness of the Purchase
Agreement.
Accordingly, the parties hereto
agree as follows:
ARTICLE 1.
GUARANTEE; FRAUDULENT TRANSFER,
ETC.; CONTRIBUTION
Section 1.1
Guarantee
Each Guarantor unconditionally
guarantees, jointly with the other Guarantors and severally, as a
primary obligor and not merely as a surety, the Obligations. Each
Guarantor further agrees that the Obligations may be extended or
renewed, in whole or in part, without notice to or further assent
from it and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Obligation. Each
Guarantor agrees to make any payment under this Guarantee Agreement
pro rata among the Purchasers based on the relative unpaid
principal balances of their respective Notes.
Section 1.2 Guarantee of
Payment
Each Guarantor further agrees that
its guarantee hereunder constitutes a guarantee of payment when due
and not of collection, and waives any right to require that any
resort be had by the Purchasers to any of the security held for
payment of the Obligations or to any balance of any deposit account
or credit on the books of the Purchasers in favor of the Company or
any other person.
Section 1.3 Fraudulent
Transfer
Anything in this Guarantee Agreement
to the contrary notwithstanding, the obligations of each Guarantor
hereunder shall be limited to a maximum aggregate amount equal to
the greatest amount that would not render such Guarantor’s
obligations hereunder subject to avoidance as a fraudulent
transfer, obligation or conveyance under Section 548 of Title
11 of the United States Code or any provisions of applicable state
law (collectively, the “ Fraudulent Transfer Laws
”), in each case after giving effect to all other liabilities
of such Guarantor, contingent or otherwise, that are relevant under
the Fraudulent Transfer Laws (specifically excluding, however, any
liabilities of such Guarantor (A) in respect of intercompany
debt owed or owing to the Company or Affiliates of the Company to
the extent that such debt would be discharged in an amount equal to
the amount paid by such Guarantor hereunder and (B) under any
guarantee of senior unsecured debt or indebtedness subordinated in
right of payment to the Obligations, which guarantee contains a
limitation as to maximum amount similar to that set forth in this
Section, pursuant to which the liability of such Guarantor
hereunder is included in the liabilities taken into account in
determining such maximum amount) and after giving effect as assets
to the value (as determined under the applicable provisions of the
Fraudulent Transfer Laws) of any rights to subrogation,
contribution, reimbursement, indemnity or similar rights of such
Guarantor pursuant to (I) applicable law or (II) any agreement
providing for an equitable allocation among such Guarantor and
other Affiliates of the Company of obligations arising under
guarantees by such parties (including the agreements described in
Section 1.4).
Section 1.4
Contributions
In addition to all rights of
indemnity and subrogation the Guarantors may have under applicable
law (but subject to this paragraph), the Company agrees that
(i) in the event a payment shall be made by any Guarantor
hereunder, the Company shall indemnify such Guarantor for the full
amount of such payment, and such Guarantor shall be subrogated to
the rights of the Person to whom such payments shall have been made
to the extent of such payment, and (ii) in the event that any
assets of any Guarantor shall be sold pursuant to any Transaction
Document to satisfy any claim of the Purchasers, the Company shall
indemnify such Guarantor in an amount equal to the greater of the
book value or the fair market value of the assets so sold. Each
Guarantor (a “ Contributing Guarantor ”) agrees
(subject to this paragraph) that, in the event a payment shall be
made by any other Guarantor hereunder or assets of any other
Guarantor shall be sold pursuant to any Transaction Document to
satisfy a claim of the Purchasers and such other Guarantor (the
“ Claiming Guarantor ”) shall not have been
fully indemnified by the Company as provided in this paragraph, the
Contributing Guarantor shall indemnify the Claiming Guarantor in an
amount equal to the amount of such payment or the greater of the
book value or the fair market value of such assets, as applicable,
in each case multiplied by a fraction of which the numerator shall
be the net worth of the Contributing Guarantor on the date hereof
and the denominator shall be the aggregate net worth of all the
Guarantors on the date hereof (or, in the case of any Guarantor
becoming a party hereto pursuant to Article 14, the date of the
Supplement hereto executed and delivered by such Guarantor). Any
Guarantor making any payment to a Claiming Guarantor pursuant to
this paragraph shall be subrogated to the rights of such Claiming
Guarantor under this paragraph to the extent of such payment.
Notwithstanding any provision of this paragraph to the contrary,
all rights of the Guarantors under this paragraph and all other
rights of indemnity, contribution or subrogation under applicable
law or otherwise shall be fully subordinated to the final and
indefeasible payment in full in cash of the Obligations. No failure
on the part of the Company or any Guarantor to make the payments
required by this paragraph (or any other payments required under
applicable law or otherwise) shall in any respect limit the
obligations and liabilities of any Guarantor with respect to its
obligations under this paragraph, and each Guarantor shall remain
liable for the full amount of the obligations of such Guarantor
under this paragraph.
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ARTICLE 2.
OBLIGATIONS NOT WAIVED
To the fullest extent permitted by
applicable law, each Guarantor waives presentment to, demand of
payment from, and protest to the Company or any Guarantor of any of
the Obligations, and also waives notice of acceptance of its
guarantee and notice of protest for nonpayment. To the fullest
extent permitted by applicable law, the obligations of each
Guarantor hereunder shall not be affected by (i) the failure
of the Purchasers to assert any claim or demand or to enforce or
exercise any right or remedy against the Company or any other
Guarantor under the provisions of the Transaction Documents, or
otherwise, (ii) any rescission, waiver, amendment or
modification of, or any release from, any of the terms or
provisions of this Guarantee Agreement, any other Transaction
Document, any guarantee or any other agreement, including with
respect to any other Guarantor under this Guarantee Agreement or
(iii) the failure to perfect any security interest in, or the
release of, any of the security held by or on behalf of the
Purchasers.
ARTICLE 3.
SECURITY; NEGATIVE PLEDGE ON
ASSETS
Each of the Company and the
Guarantors (as defined in the Guaranty), will not create, incur,
assume or permit to exist, and no person shall obtain, any Lien on
any of the assets of the Company or the Guarantors or the proceeds
thereof nor will any of the Company or the Guarantors agree with
any other person not to grant a Lien on any of its assets.
Notwithstanding anything contained in this Agreement to the
contrary, the Company shall be permitted to grant a Lien on all or
part of its assets in order to secure its obligations under
Permitted Indebtedness.
ARTICLE 4.
NO DISCHARGE OR DIMINISHMENT OF
GUARANTEE
The obligations of each Guarantor
hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the final and
indefeasible payment in full in cash of the Obligations), including
any claim of waiver, release, surrender, alteration or compromise
of any of the Obligations, and shall not be subject to any defense
or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Guarantor hereunder shall not be
discharged or impaired or otherwise affected by the failure of the
Purchasers to assert any claim or demand or to enforce any remedy
under any Transaction Document or any other agreement, by any
waiver or modification of any provision of any thereof, by any
default, failure or delay, willful or otherwise, in the performance
of the Obligations, or by any other act or omission that may or
might in any manner or to any extent vary the risk of any Guarantor
or that would otherwise operate as a discharge of any Guarantor as
a matter of law or equity (other than the final and indefeasible
payment in full in cash of all the Obligations).
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ARTICLE 5.
DEFENSES WAIVED
To the fullest extent permitted by
applicable law, each of the Guarantors waives any defense based on
or arising out of any defense of the Company or any other Guarantor
or the unenforceability of the Obligations or any part thereof from
any cause, or the cessation from any cause of the liability of the
Company or any other Guarantor, other than the final and
indefeasible payment in full in cash of the Obligations. The
Purchasers may, at their election, (i) foreclose on any
security held by one or more of them by one or more judicial or
nonjudicial sales, (ii) accept an assignment of any such
security in lieu of foreclosure, (iii) compromise or adjust
any part of the Obligations, and (iv) make any other
accommodation with the Company or any Guarantor or exercise any
other right or remedy available to them against the Company or any
Guarantor; provided, however, that any election by the Purchasers
under clauses (i), (ii), (iii) and/or (iv) of this
sentence shall not affect or impair in any way the liability of any
Guarantor hereunder except to the extent the Obligations have been
fully, finally and indefeasibly paid in cash. Pursuant to
applicable law, each Guarantor waives any defense arising out of
any such election even though such election operates, pursuant to
applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such
Guarantor against the Company or any other Guarantor, as
applicable, or any security.
ARTICLE 6.
AGREEMENT TO PAY;
SUBORDINATION
In furtherance of the foregoing and
not in limitation of any other right that any Purchaser has at law
or in equity against any Guarantor by virtue hereof, upon the
failure of the Company or any other Guarantor to pay any Obligation
when and as the same shall become due (after giving effect to any
applicable grace period), whether at maturity, by acceleration,
after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to any
Purchaser as designated thereby in cash the amount of such unpaid
Obligations. Upon payment by any Guarantor of any sums to any
Purchaser as provided above, all rights of such Guarantor against
the Company or the applicable Guarantor arising as a result thereof
by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subordinate and
junior in right of payment to the prior final and indefeasible
payment in full in cash of the Obligations. In addition, any debt
of the Company or any other Guarantor now or hereafter held by any
Guarantor is hereby subordinated in right of paymen
