Exhibit 10.10
GUARANTY
GUARANTY, dated as of April 25, 2007 made by each of the
undersigned (each a " Guarantor ", and collectively, the "
Guarantors "), in favor of ROCKMORE INVESTMENT MASTER FUND
LTD., a Bermuda exempted company, in its capacity as
collateral agent (in such capacity, the " Collateral Agent
") for the "Purchasers" (as defined below) party to the Securities
Purchase Agreement, dated as of even date herewith (as amended,
restated or otherwise modified from time to time, the "
Securities Purchase Agreement ").
W I
T N E S S E T
H :
WHEREAS, Carrington Laboratories, Inc., a Texas corporation
(the " Company "), and each party listed as a
"Purchaser" on the Schedule of Purchasers attached thereto
(together with their respective successors and assigns, each a "P
urchaser ", and collectively, the " Purchasers ") are
parties to the Securities Purchase Agreement;
WHEREAS, the Securities Purchase Agreement requires that the
Guarantors execute and deliver to the Collateral Agent, (i) a
guaranty guaranteeing all of the obligations of the Company under
the Securities Purchase Agreement, the Debentures (as defined below
and the "Transaction Documents" (as defined in the Securities
Purchase Agreement, and all such documents as amended, restated or
otherwise modified from time to time, the "Transaction
Documents" ); and (ii) a Security Agreement dated the date
hereof granting the Collateral Agent a lien in all of their
personal property subject to certain exclusions (as amended,
restated or otherwise modified from time to time, (the "Security
Agreement" ); and
WHEREAS, each Guarantor has determined that the execution,
delivery and performance of this Guaranty directly benefits, and is
in the best interest of, such Guarantor;
NOW, THEREFORE, in consideration of the premises and the
agreements herein and in order to induce the Purchasers to perform
under the Securities Purchase Agreement, each Guarantor hereby
agrees with Collateral Agent and each Purchaser as follows:
SECTION 1. Definitions .
Reference is hereby made to the Securities Purchase Agreement and
the "Debentures" (as defined therein) from time to time issued
pursuant thereto (as such Debentures may be amended, restated,
replaced or otherwise modified from time to time in accordance with
the terms thereof, collectively, the " Debentures ") for a
statement of the terms thereof. All terms used in this Guaranty,
which are defined in the Securities Purchase Agreement or the
Debentures and not otherwise defined herein, shall have the same
meanings herein as set forth therein. In the event of any conflict
between the Securities Purchase Agreement and the Debentures as to
the definition of any terms, the Securities Purchase Agreement
definitions shall apply.
SECTION 2. Guaranty . The
Guarantors, jointly and severally, hereby unconditionally and
irrevocably, guaranty the punctual payment, as and when due and
payable, by stated maturity or otherwise, of all Obligations (as
defined in the Security Agreement) including, without limitation,
all Obligations of the Company from time to time owing by it in
respect of or under the Securities Purchase Agreement, the
Debentures and the other Transaction Documents, including, without
limitation, all interest that accrues after the commencement of any
Insolvency Proceeding (as defined in the Security Agreement) of the
Company or any Guarantor, whether or not the payment of such
interest is unenforceable or is not allowable due to the existence
of such Insolvency Proceeding, and all fees, commissions, expense
reimbursements, indemnifications and all other amounts due or to
become due under any of the Transaction Documents, including
without limitation, attorney's fees and expenses of Collateral
Agent (such obligations, to the extent not paid by the Company,
being the " Guaranteed Obligations "), and the Guarantors,
jointly and severally, agree to pay any and all expenses (including
reasonable counsel fees and expenses) reasonably incurred by the
Collateral Agent in enforcing any rights under this Guaranty.
Without limiting the generality of the foregoing, each Guarantor's
liability hereunder shall extend to all amounts that constitute
part of the Guaranteed Obligations and would be owed by the Company
to the Collateral Agent and/or Purchaser(s) under the Securities
Purchase Agreement and the Debentures but for the fact that they
are unenforceable or not allowable due to the existence of an
Insolvency Proceeding involving any Guarantor or the Company (each,
a " Transaction Party ").
SECTION 3. Guaranty Absolute;
Continuing Guaranty; Assignments .
(a) The Guarantors, jointly and
severally, guaranty that the Guaranteed Obligations will be paid
strictly in accordance with the terms of the Transaction Documents,
regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the
rights of the Collateral Agent with respect thereto. The
obligations of each Guarantor under this Guaranty are independent
of the Guaranteed Obligations, and a separate action or actions may
be brought and prosecuted against any Guarantor to enforce such
obligations, irrespective of whether any action is brought against
any Transaction Party or whether any Transaction Party is joined in
any such action or actions. This Guaranty is a guaranty of payment
and performance and not collection only. The liability of any
Guarantor under this Guaranty shall be irrevocable, absolute,
independent and unconditional and shall not be affected by any
circumstance whatsoever (other than the indefeasible payment in
full and the complete performance of all of the Obligations) which
may constitute a defense or a legal or equitable discharge (whether
in whole or in part) of a guarantor or surety, whether foreseen or
unforeseen and whether similar or dissimilar to any circumstance
described in this Guaranty. Without limiting the foregoing, each
Guarantor hereby irrevocably waives, to the extent permitted by
law, any defenses it may now or hereafter have in any way relating
to, any or all of the following:
(i) any
lack of validity or enforceability of any Transaction Document or
any agreement or instrument relating thereto;
(ii) any
change in the time, manner or place of payment of, or in any other
term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from any
Transaction Document, including, without limitation, any increase
in the Guaranteed Obligations resulting from the extension of
additional credit to any Transaction Party or otherwise;
(iii) any
taking, exchange, release or non-perfection of any Collateral (as
defined in the Security Agreement), or any taking, release or
amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Guaranteed Obligations;
(iv) any
change, restructuring or termination of the corporate, limited
liability company or partnership structure or existence of any
Transaction Party; or
(v) any
other circumstance (including any statute of limitations) or any
existence of or reliance on any representation by the Collateral
Agent that might otherwise constitute a defense available to, or a
discharge of, any Transaction Party or any other guarantor or
surety.
This Guaranty shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the
Guaranteed Obligations is rescinded or must otherwise be returned
by the Collateral Agent or any other Person upon the insolvency,
bankruptcy or reorganization of any Transaction Party or otherwise,
all as though such payment had not been made.
(b) This Guaranty is a continuing
guaranty and shall (i) remain in full force and effect until (x)
the indefeasible repayment in full in cash and/or complete
conversion to equity securities of the Company of all indebtedness
obligations owed by the Company to the Purchasers under the
Debentures (including, without limitation, all principal, interest
and attorneys and other fees and expenses related to or under the
Debentures) and (y) repayment of all obligations (including without
limitation, attorneys and other fees and expenses) under the
Security Documents, and (ii) be binding upon each Guarantor and its
respective successors and assigns. This Guaranty shall inure to the
benefit of and be enforceable by the Collateral Agent and its
successors, and permitted pledgees, transferees and assigns.
Without limiting the generality of the foregoing sentence, the
Collateral Agent or any Purchaser may pledge, assign or otherwise
transfer all or any portion of its rights and obligationsunder and
subject to the terms of any Transaction Document to any other
Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to such Purchaser
herein or otherwise, in each case as provided in the Securities
Purchase Agreement or such Transaction Document.
SECTION 4. Waivers . To
the extent permitted by applicable law, each Guarantor hereby
waives promptness, diligence, notice of acceptance and any other
notice with respect to any of the Guaranteed Obligations and this
Guaranty and any requirement that the Collateral Agent exhaust any
right or take any action against any Transaction Party or any other
Person or any Collateral. Each Guarantor acknowledges that it will
receive direct and indirect benefits from the financing
arrangements contemplated herein and that the waiver set forth in
this Section 4 is knowingly made in contemplation of
such benefits. The Guarantors hereby waive any right to revoke this
Guaranty, and acknowledge that this Guaranty is continuing in
nature and applies to all Guaranteed Obligations, whether existing
now or in the future. Each Guarantor agrees that there are no
conditions to the effectiveness or enforceability of this
Guaranty.
SECTION 5. Subrogation .
No Guarantor may exercise any rights that it may now or hereafter
acquire against any Transaction Party or any other guarantor that
arise from the existence, payment, performance or enforcement of
any Guarantor's obligations under this Guaranty, including, without
limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any
claim or remedy of the Collateral Agent or any Purchaser against
any Transaction Party or any other guarantor or any Collateral,
whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without
limitation, the right to take or receive from any Transaction Party
or any other guarantor, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security
solely on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations (other than inchoate indemnity
obligations not yet due and payable) and all other amounts payable
under this Guaranty (other than inchoate indemnity obligations not
yet due and payable) shall have indefeasibly been paid in full in
cash. If any amount shall be paid to a Guarantor in violation of
the immediately preceding sentence at any time prior to the later
of the payment in full in cash of the Guaranteed Obligations and
all other amounts payable under this Guaranty, such amount shall be
held in trust for the benefit of the Collateral Agent and shall
forthwith be paid to the Collateral Agent to be credited and
applied to the Guaranteed Obligations and all other amounts payable
under this Guaranty, whether matured or unmatured, in accordance
with the terms of the Transaction Document, or to be held as
Collateral for any Guaranteed Obligations or other amounts payable
under this Guaranty thereafter arising. If (a) any Guarantor
shall make payment to the Collateral Agent of all or any part of
the Guaranteed Obligations, and (b) all of the Guaranteed
Obligations (other than inchoate indemnity obligations not yet due
and
