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SUBSIDIARY GUARANTY

Guarantee Agreement

SUBSIDIARY GUARANTY | Document Parties: EDIETS COM INC | EDIETS, INC | eDietscom, Inc | NUTRIOCOM, INC | PRIDES CAPITAL FUND I, LP You are currently viewing:
This Guarantee Agreement involves

EDIETS COM INC | EDIETS, INC | eDietscom, Inc | NUTRIOCOM, INC | PRIDES CAPITAL FUND I, LP

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Title: SUBSIDIARY GUARANTY
Governing Law: New York     Date: 9/4/2007
Industry: Personal Services     Sector: Services

SUBSIDIARY GUARANTY, Parties: ediets com inc , ediets  inc , edietscom  inc , nutriocom  inc , prides capital fund i  lp
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Exhibit 10.7

SUBSIDIARY GUARANTY

Dated as of August 31, 2007

From

THE GUARANTORS NAMED HEREIN

and

THE ADDITIONAL GUARANTORS REFERRED TO HEREIN

as Guarantors

in favor of

PRIDES CAPITAL FUND I, L.P.

 


TABLE OF CONTENTS

 

Section

        Page

Section 1.

   Guaranty; Limitation of Liability    1

Section 2.

   Guaranty Absolute    2

Section 3.

   Waivers and Acknowledgments    3

Section 4.

   Subrogation    3

Section 5.

   Payments Free and Clear of Taxes, Etc.    4

Section 6.

   Representations and Warranties    5

Section 7.

   Covenants    5

Section 8.

   Amendments, Guaranty Supplements, Etc.    6

Section 9.

   Notices, Etc.    6

Section 10.

   No Waiver; Remedies    6

Section 11.

   Right of Set-off    6

Section 12.

   Indemnification    7

Section 13.

   Subordination    7

Section 14.

   Continuing Guaranty; Assignments under the Note    8

Section 15.

   Execution in Counterparts    9

Section 16.

   Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.    9

Exhibit A—Guaranty Supplement

 

i

 


SUBSIDIARY GUARANTY

THIS SUBSIDIARY GUARANTY dated as of August 31, 2007 is made by the parties listed on the signature pages hereof under the caption “Subsidiary Guarantors” and the Additional Guarantors (as defined in Section 8(b)) (such Persons so listed and the Additional Guarantors being, collectively, the “ Guarantors ” and, individually, each a “ Guarantor ”) in favor of Prides Capital Fund I, L.P. (the “ Purchaser ”).

PRELIMINARY STATEMENT. The Purchaser has purchased a $10,000,000 note dated as of the date hereof (the “ Note ”; capitalized terms defined therein and not otherwise defined herein being used herein as therein defined) pursuant to a Note Purchase Agreement dated August 31, 2007 (the “ Note Purchase Agreement ”) between eDiets.com, Inc., a Delaware corporation (the “ Company ”) and the Purchaser. Each Guarantor will derive substantial direct and indirect benefits from financing provided by the Note. It is a condition precedent to the purchase of the Note that each Guarantor shall have executed and delivered this Guaranty.

NOW, THEREFORE, in consideration of the premises and in order to induce the Purchaser to purchase the Note, each Guarantor, jointly and severally with each other Guarantor, hereby agrees as follows:

Section 1.  Guaranty; Limitation of Liability (a) Each Guarantor hereby absolutely, unconditionally and irrevocably guarantees the punctual payment when due, whether at scheduled maturity or on any date of a required prepayment or by acceleration, demand or otherwise, of all amounts due under the Note ( the “ Obligations ”) (including, without limitation, any extensions, modifications, substitutions, amendments or renewals of any or all of the foregoing Obligations), whether direct or indirect, absolute or contingent, and whether for principal, interest, premiums, fees, indemnities, contract causes of action, costs, expenses or otherwise (such Obligations being the “ Guaranteed Obligations ”), and agrees to pay any and all expenses (including, without limitation, fees and expenses of counsel) incurred by the Purchaser in enforcing any rights under this Guaranty, the Security Agreement dated as of the date hereof (the “ Security Agreement ”) among the Purchaser and the parties signatory thereto (each such party, a “ Note Party ” and collectively, the “ Note Parties ”) or the Note (collectively, the “ Note Documents ”). Without limiting the generality of the foregoing, each Guarantor’s liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by any other Note Party under or in respect of the Note Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving such other Note Party.

(b) Each Guarantor, and by its acceptance of this Guaranty, the Purchaser, hereby confirms that it is the intention of all such parties that this Guaranty and the Obligations of each Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law (as hereinafter defined), the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent applicable to this Guaranty and the Obligations of each Guarantor hereunder. To effectuate the foregoing intention, the Purchaser and the Guarantors hereby irrevocably agree that the Obligations of each Guarantor under this Guaranty at any time shall be limited to the maximum amount as will result in the Obligations of such Guarantor under this Guaranty not constituting a fraudulent transfer or conveyance. For purposes hereof, “ Bankruptcy Law ” means the

 


Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

(c) Each Guarantor hereby unconditionally and irrevocably agrees that in the event any payment shall be required to be made to the Purchaser under this Guaranty or any other guaranty, such Guarantor will contribute, to the maximum extent permitted by law, such amounts to each other Guarantor and each other guarantor so as to maximize the aggregate amount paid to the Purchaser under or in respect of the Note Documents.

Section 2.  Guaranty Absolute . Each Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Note 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 Purchaser with respect thereto. The Obligations of each Guarantor under or in respect of this Guaranty are independent of the Guaranteed Obligations or any other Obligations of any other Note Party under or in respect of the Note Documents, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce this Guaranty, irrespective of whether any action is brought against the Company or any other Note Party or whether the Company or any other Note Party is joined in any such action or actions. The liability of each Guarantor under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to, any or all of the following:

(a) any lack of validity or enforceability of any Note Document or any agreement or instrument relating thereto;

(b) 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 Obligations of any other Note Party under or in respect of the Note Documents, or any other amendment or waiver of or any consent to departure from any Note Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Note Party or any of its Subsidiaries or otherwise;

(c) any taking, exchange, release or non-perfection of any Collateral (as such term is defined in the Security Agreement) (or any other collateral, 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);

(d) any manner of application of Collateral or any other collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any Collateral or any other collateral for all or any of the Guaranteed Obligations or any other Obligations of any Note Party under the Note Documents or any other assets of any Note Party or any of its subsidiaries;

(e) any change, restructuring or termination of the corporate structure or existence of any Note Party or any of its subsidiaries;

 

- 2 -

 


(f) the failure of any other individual or business entity to execute or deliver this Guaranty, any Guaranty Supplement (as hereinafter defined) or any other guaranty or agreement or the release or reduction of liability of any Guarantor or other guarantor or surety with respect to the Guaranteed Obligations; or

(g) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by the Purchaser that might otherwise constitute a defense available to, or a discharge of, any Note 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 Purchaser or any successor-in-interest, assignee or transferee of the Purchaser upon the insolvency, bankruptcy or reorganization of the Company or any other Note Party or otherwise, all as though such payment had not been made.

Section 3.  Waivers and Acknowledgments (a) Each Guarantor hereby unconditionally and irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for performance, notice of nonperformance, default, acceleration, protest or dishonor and any other notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that the Purchaser protect, secure, perfect or insure any lien or other encumbrance or any property subject thereto or exhaust any right or take any action against any Note Party or any other entity or any Collateral.

(b) Each Guarantor hereby unconditionally and irrevocably waives any right to revoke this Guaranty and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.

(c) Each Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by reason of any claim or defense based upon an election of remedies by the Purchaser that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of such Guarantor or other rights of such Guarantor to proceed against any of the other Note Parties, any other guarantor or any entity or any Collateral and (ii) any defense based on any right of set-off or counterclaim against or in respect of the Obligations of such Guarantor hereunder.

(d) Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Note Documents and that the waivers set forth in Section 2 and this Section 3 are knowingly made in contemplation of such benefits.

Section 4.  Subrogation . Each Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against the Company, any other Note Party or any other insider guarantor that arise from the existence, payment, performance or enforcement of such Guarantor’s Obligations under or in respect of this Guaranty or any other Note Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Purchaser against the Company, any other Note Party or any other insider

 

- 3 -

 


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 the Company, any other Note Party or any other insider guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full in cash. If any amount shall be paid to any Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty, such amount shall be received and held in trust for the benefit of the Purchaser, shall be segregated from other property and funds of such Guarantor and shall forthwith be paid or delivered to the Purchaser in the same form as so received (with any necessary endorsement or assignment) 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 Note Documents, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Guaranty thereafter arising. If (i) any Guarantor shall make payment to the Purchaser of all or any part of the Guaranteed Obligations and (ii) all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been paid in full in cash, the Purchaser will, at such Guarantor’s request and expense, execute and deliver to such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment made by such Guarantor pursuant to this Guaranty.

Section 5.  Payments Free and Clear of Taxes, Etc . (a) Any and all payments made by any Guarantor under or in respect of this Guaranty or any other Note Document shall be made free and clear of and without deduction for any and all present or future Taxes (as defined below). If any Guarantor shall be required by law to deduct any Taxes from or in respect of any sum payable under or in respect of this Guaranty or any other Note Document to the Purchaser, (i) the sum payable by such Guarantor shall be increased as may be necessary so that after such Guarantor and the Purchaser have made all required deductions (including deductions applicable to additional sums payable under this Section 5), the Purchaser receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Guarantor shall make all such deductions and (iii) such Guarantor shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

(b) In addition, each Guarantor agrees to pay any present or future Other Taxes (as defined below) that arise from any payment made by or on behalf of such Guarantor under or in respect of this Guaranty or any other Note Document or from the execution, delivery or registration of, performance under, or otherwise with respect to, this Guaranty and the other Note Documents.

(c) Each Guarantor will indemnify the Purchaser for and hold it harmles


 
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