UNLIMITED GUARANTY AGREEMENT THIS GUARANTY AGREEMENT (" Guaranty ") is made as of the 20 th day of February, 2007, by Guarantor (as hereinafter defined) for the benefit of Lender (as hereinafter defined)

Exhibit 10.5  

UNLIMITED

GUARANTY AGREEMENT

THIS GUARANTY AGREEMENT (" Guaranty ") is made as of the 20 ^th day of February, 2007, by Guarantor (as hereinafter defined) for the benefit of Lender (as hereinafter defined).

1.   Definitions . As used in this Guaranty, the following terms shall have the meanings indicated below:

(a)   The term " Lender " shall mean AMEGY BANK NATIONAL ASSOCIATION, a national banking association, whose address for notice purposes is the following: 1807 Ross Avenue, Suite 400, Dallas, Dallas County, Texas 75201.

(b)   The term " Borrower " shall mean the following (whether one or more): DOUGHERTY’S PHARMACY, INC., a Texas corporation, ALVIN MEDICINE MAN, LP, a Texas limited partnership, ANGLETON MEDICINE MAN, LP, a Texas limited partnership, and SANTA FE MEDICINE MAN, LP, a Texas limited partnership.

(c)   The term " Guaranteed Indebtedness " shall mean (i) all principal indebtedness owing by Borrower to Lender now existing or hereafter, (ii) all accrued but unpaid interest on any of the indebtedness owing under the instrument described in (i) above, (iii) all obligations and other indebtedness of Borrower to Lender under any documents, instruments and/or agreements evidencing, securing, governing and/or pertaining to all or any part of the indebtedness described in (i) and (ii) above (collectively, the " Loan Documents "), (iv) all costs and expenses incurred by Lender in connection with the collection and administration of all or any part of the indebtedness and obligations described in (i), (ii) and (iii) above or the protection or preservation of, or realization upon, the collateral securing all or any part of such indebtedness and obligations, including without limitation all reasonable attorneys' fees, and (v) all renewals, extensions, modifications and rearrangements of the indebtedness and obligations described in (i), (ii), (iii) and (iv) above.

(d)   The term " Guarantor " shall mean _______________, a  __________(Entity), whose address for notice purposes is the following: 16250 Dallas Parkway, Suite 100, Dallas, Texas 75248-2622.

2.   Obligations . As an inducement to Lender to extend or continue to extend credit and other financial accommodations to Borrower, Guarantor, for value received, does hereby unconditionally and absolutely guarantee the prompt and full payment and performance of the Guaranteed Indebtedness when due or declared to be due and at all times thereafter.

3.   Character of Obligations .

(a)   This is an absolute, continuing and unconditional guaranty of payment and not of collection and if at any time or from time to time there is no outstanding Guaranteed Indebtedness, the obligations of Guarantor with respect to any and all Guaranteed Indebtedness incurred thereafter shall not be affected. This Guaranty and the Guarantor's obligations hereunder are irrevocable. All of the Guaranteed Indebtedness shall be conclusively presumed to have been made or acquired in acceptance hereof. Guarantor shall be liable, jointly and severally, with Borrower and any other guarantor of all or any part of the Guaranteed Indebtedness.

(b)   Lender may, at its sole discretion and without impairing its rights hereunder, apply any payments on the Guaranteed Indebtedness that Lender receives to that portion of the Guaranteed Indebtedness, if any, not guaranteed hereunder.

(c)   Guarantor agrees that its obligations hereunder shall not be released, diminished, impaired, reduced or affected by the existence of any other guaranty or the payment by any other guarantor of all or any part of the Guaranteed Indebtedness.

(d)   Guarantor's obligations hereunder shall not be released, diminished, impaired, reduced or affected by, nor shall any provision contained herein be deemed to be a limitation upon, the amount of credit which Lender may extend to Borrower, the number of transactions between Lender and Borrower, payments by Borrower to Lender or Lender's allocation of payments by Borrower.

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4.   Representations and Warranties . Guarantor hereby represents and warrants the following to Lender:

(a)   This Guaranty may reasonably be expected to benefit, directly or indirectly, Guarantor; and

(b)   Guarantor is familiar with, and has independently reviewed the books and records regarding, the financial condition of Borrower and is familiar with the value of any and all collateral intended to be security for the payment of all or any part of the Guaranteed Indebtedness; provided, however, Guarantor is not relying on such financial condition or collateral as an inducement to enter into this Guaranty; and

(c)   Guarantor has adequate means to obtain from Borrower on a continuing basis information concerning the financial condition of Borrower and Guarantor is not relying on Lender to provide such information to Guarantor either now or in the future; and

(d)   Guarantor has the power and authority to execute, deliver and perform this Guaranty and any other agreements executed by Guarantor contemporaneously herewith, and the execution, delivery and performance of this Guaranty and any other agreements executed by Guarantor contemporaneously herewith do not and will not violate (i) any agreement or instrument to which Guarantor is a party, or (ii) any law, rule, regulation or order of any governmental authority to which Guarantor is subject; and

(e)   Neither Lender nor any other party has made any representation, warranty or statement to Guarantor in order to induce Guarantor to execute this Guaranty; and

(f)   The financial statements and other financial information regarding Guarantor heretofore and hereafter delivered to Lender are and shall be true and correct in all material respects and fairly present the financial position of Guarantor as of the dates thereof, and no material adverse change has occurred in the financial condition of Guarantor reflected in the financial statements and other financial information regarding Guarantor heretofore delivered to Lender since the date of the last statement thereof; and

(g)   As of the date hereof, and after giving effect to this Guaranty and the obligations evidenced hereby, (i) Guarantor is and will be solvent, (ii) the fair saleable value of Guarantor's assets exceeds and will continue to exceed its liabilities (both fixed and contingent), and (iii) Guarantor is and will continue to be able to pay its debts as they mature.

5.   Covenants . Guarantor hereby covenants and agrees with Lender as follows:

(a)   Guarantor shall not, so long as its obligations under this Guaranty continue, transfer or pledge any material portion of its assets for less than full and adequate consideration; and

(b)   Guarantor shall promptly furnish to Lender on a timely basis the financial statements and other financial information of Guarantor as set forth in that certain Loan Agreement of even date herewith, by and between Borrowers and Lenders, as the same may be amended from time to time; and

(c)   Guarantor shall comply with all terms and provisions of the Loan Documents that apply to Guarantor; and

(d)   Guarantor shall promptly inform Lender of (i) any litigation or governmental investigation against Guarantor or affecting any security for all or any part of the Guaranteed Indebtedness or this Guaranty which, if determined adversely, might have a material adverse effect upon the financial condition of Guarantor or upon such security or might cause a default under any of the Loan Documents, (ii) any claim or controversy which might become the subject of such litigation or governmental investigation, and (iii) any material adverse change in the financial condition of Guarantor.

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6.   Consent and Waiver .

(a)   Guarantor waives (i) promptness, diligence and notice of acceptance of this Guaranty and notice of the incurring of any obligation, indebtedness or liability to which this Guaranty applies or may apply and waives presentment for payment, notice of nonpayment, protest, demand, notice of protest, notice of intent to accelerate, notice of acceleration, notice of dishonor, diligence in enforcement and indulgences of every kind, (ii) the taking of any other action by Lender, including without limitation giving any notice of default or any other notice to, or making any demand on, Borrower, any other guarantor of all or any part of the Guaranteed Indebtedness or any other party, and (iii) to the maximum extent allowed by law the provisions of §51.003 of the Texas Property Code, as in effect on the date of this Guaranty or as it may be amended from time to time.

(b)   Guarantor waives any rights Guarantor has under, or any requirements imposed by, Chapter 34 of the Texas Business and Commerce Code, as in effect on the date of this Guaranty or as it may be amended from time to time.

(c)   Lender may at any time, without the consent of or notice to Guarantor, without incurring responsibility to Guarantor and without impairing, releasing, reducing or affecting the ob