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EXHIBIT 10.132
GUARANTY
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(Subsidiaries)
This GUARANTY is entered into as of the 19th day of March, 1999, by THE
XXXXX GROUP, INCORPORATED, a Florida corporation, and RAMSAY YOUTH SERVICES
PUERTO RICO, INC., a Puerto Rico corporation (collectively referred to herein as
"Guarantors" and, individually, as a "GUARANTOR"), in favor of and for the
benefit of FLEET CAPITAL CORPORATION, a Rhode Island corporation, as agent for
and representative of (in such capacity herein called "AGENT") the financial
institutions ("LENDERS") party to the Loan and Security Agreement (as
hereinafter defined), each of the Lenders, and their successors and assigns.
RECITALS
X. Xxxxxx Youth Services, Inc., f/k/a Ramsay Health Care, Inc.
("HOLDINGS") and certain subsidiaries of Holdings (together with Holdings,
collectively referred to herein as "BORROWERS" and, individually, as a
"BORROWER") have entered into that certain Loan and Security Agreement dated as
of October 30, 1998, with Agent and Lenders, as amended by that certain First
Amendment to Loan and Security Agreement dated as of March ___, 1999 (the "FIRST
AMENDMENT") (said Loan and Security Agreement, as amended, supplemented or
otherwise modified from time to time being the "LOAN AND SECURITY AGREEMENT";
capitalized terms not otherwise defined herein shall have the meaning ascribed
to such terms in the Loan and Security Agreement).
B. Each of the Guarantors is either a direct or indirect Subsidiary of
a Borrower. Guarantors will receive direct and indirect benefits from the
transactions contemplated by the Loan and Security Agreement in an amount at
least equal to the obligations of Guarantors under this Guaranty, and the Loans
to the Borrowers pursuant to the Loan and Security Agreement will produce direct
financial benefits to the Guarantors.
C. It is a condition precedent to the First Amendment and making of
Loans under the Loan and Security Agreement that Borrowers' obligations
thereunder be guaranteed by Guarantors and that the respective obligations of
Guarantors under the Guaranty be secured by the Security Agreement of even date
herewith (the "SECURITY AGREEMENT"), executed by Guarantors in favor of Agent
for the benefit of Lenders.
D. Guarantors each are willing irrevocably and unconditionally to
guaranty such obligations of any Borrower subject to the terms and provisions
hereof.
NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce Lenders to enter into the Loan and Security Agreement and to
make the Loans thereunder, each Guarantor hereby agrees as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS. As used in this Guaranty, the following
terms shall have the following meanings unless the context otherwise requires:
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"GUARANTEED OBLIGATIONS" has the meaning assigned to that term
in subsection 2.1.
"GUARANTY" means this Guaranty dated as of March ___, 1999, as
it may be amended, supplemented or otherwise modified from time to
time.
"PAYMENT IN FULL" or "PAID IN FULL" means the final and
indefeasible payment in full in cash or such other type of payment or
satisfaction as Agent may approve.
1.2 INTERPRETATION.
(a) References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Guaranty unless
otherwise specifically provided.
(b) In the event of any conflict or inconsistency between the
terms, conditions and provisions of this Guaranty and the terms,
conditions and provisions of the Loan and Security Agreement, the
terms, conditions and provisions of this Guaranty shall prevail.
SECTION 2. THE GUARANTY
2.1 GUARANTY OF THE GUARANTEED OBLIGATIONS. Subject to the provisions
of subsection 2.2(a), Guarantors hereby, jointly and severally, irrevocably and
unconditionally guaranty, each as a primary obligor and not merely as a surety,
the due and punctual payment in full of all Guaranteed Obligations when the same
shall become due, whether at stated maturity, by required prepayment,
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. Section 362(a)), as amended. The term "GUARANTEED OBLIGATIONS"
is used herein in its most comprehensive sense and includes any and all
Obligations of any Loan Party now or hereafter made, incurred or created,
whether absolute or contingent (including contingent obligations in respect of
underwriters of credit or any other Guaranty), liquidated or unliquidated,
whether due or not due, and however arising under or in connection with the Loan
and Security Agreement and the other Loan Documents, including those arising
under successive borrowing transactions under the Loan and Security Agreement
which shall either continue the Obligations of any Borrower or from time to time
renew them after they have been satisfied.
2.2 LIMITATION ON AMOUNT GUARANTEED; CONTRIBUTION BY GUARANTORS. (a)
Anything contained in this Guaranty to the contrary notwithstanding, the
obligations of each Guarantor hereunder shall be limited to a maximum aggregate
amount equal to the largest amount that would not render its obligations
hereunder subject to avoidance as a fraudulent transfer or conveyance under
Section 548 of Title 11 of the United States Code, as amended, or any applicable
provisions of comparable state law (collectively, the "FRAUDULENT TRANSFER
LAWS"), in each case after giving effect to all other liabilities of Guarantors,
contingent or otherwise, that are relevant under the Fraudulent Transfer laws
(specifically excluding, however, any liabilities of any Guarantor (x) in
respect of intercompany indebtedness to any Borrower or other Affiliates of
Borrower to the extent that such indebtedness would be discharged in an amount
equal to the amount paid by such Guarantor hereunder and (y) under any guaranty
of Subordinated Debt which guaranty contains a limitation as to maximum amount
similar to that set forth in this subsection 2.2(a), pursuant to which the
liability of any 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 or contribution of Guarantors
pursuant to (i) applicable law or (ii) any agreement
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providing for an equitable allocation among Guarantors and other Affiliates of
any Borrower of obligations arising under guaranties by such parties.
(b) Guarantors under this Guaranty, and each guarantor under other
guaranties, if any, relating to the Loan and Security Agreement (the "RELATED
GUARANTIES") which contain a contribution provision similar to that set forth in
this subsection 2.2(b), together desire to allocate among themselves
(collectively, the "CONTRIBUTING GUARANTORS"), in a fair and equitable manner,
their obligations arising under this Guaranty and the Related Guaranties.
Accordingly, in the event any payment or distribution is made by any Guarantor
under this Guaranty or a guarantor under a Related Guaranty (a "FUNDING
GUARANTOR") that exceeds its Fair Share (as defined below), that Funding
Guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in the amount of such other Contributing Guarantor's
Fair Share Shortfall (as defined below), with the result that all such
contributions will cause each Contributing Guarantor's Aggregate Payments (as
defined below) to equal its Fair Share. "FAIR SHARE" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (i)
the ratio of (x) the Adjusted Maximum Amount (as defined below) with respect to
such Contributing Guarantor to (y) the aggregate of the Adjusted Maximum Amounts
with respect to all Contributing Guarantors, MULTIPLIED BY (ii) the aggregate
amount paid or distributed on or before such date by all Funding Guarantors
under this Guaranty and the Related Guaranties in respect of the obligations
guarantied. "FAIR SHARE SHORTFALL" means, with respect to a Contributing
Guarantor as of any date of determination, the excess, if any, of the Fair Share
of such Contributing Guarantor over the Aggregate Payments of such Contributing
Guarantor. "ADJUSTED MAXIMUM AMOUNT" means, with respect to a Contributing
Guarantor as of any date of determination, the maximum aggregate amount of the
obligations of such Contributing Guarantor under this Guaranty and the Related
Guaranties, determined in accordance with subsection 2.2(a) or, if applicable, a
similar provision contained in a Related Guaranty; PROVIDED that, solely for
purposes of calculating the "ADJUSTED MAXIMUM AMOUNT" with respect to any
Contributing Guarantor for purposes of this subsection 2.2(b), the assets or
liabilities arising by virtue of any rights to or obligations of contribution
hereunder or under any similar provision contained in a Related Guaranty shall
not be considered as assets or liabilities of such Contributing Guarantor.
"AGGREGATE PAYMENTS" means, with respect to a Contributing Guarantor as of any
date of determination, the aggregate amount of all payments and distributions
made on or before such date by such Contributing Guarantor in respect of this
Guaranty and the Related Guaranties (including, without limitation, in respect
of this subsection 2.2(b) or any similar provision contained in a Related
Guaranty). The amounts payable as contributions hereunder and under similar
provisions in the Related Guaranties shall be determined as of the date on which
the related payment or distribution is made by the applicable Funding Guarantor.
The allocation among Contributing Guarantors of their obligations as set forth
in this subsection 2.2(b) or any similar provision contained in a Related
Guaranty shall not be construed in any way to limit the liability of any
Contributing Guarantor hereunder or under a Related Guaranty. Each Contributing
Guarantor under a Related Guaranty is a third party beneficiary to the
contribution agreement set forth in this subsection 2.2(b).
2.3 LIABILITY OF EACH GUARANTOR ABSOLUTE. Each Guarantor agrees that
its obligations hereunder are, joint and several, irrevocable, absolute,
independent and unconditional and shall not be affected by any circumstance
which constitutes a legal or equitable discharge of a guarantor or surety other
than payment in full of the Guaranteed Obligations. In furtherance of the
foregoing and without limiting the generality thereof, each Guarantor agrees as
follows:
(a) This Guaranty is a guaranty of payment when due and not
of collectibility.
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(b) Agent may enforce this Guaranty upon the occurrence of an
Event of Default under the Loan and Security Agreement notwithstanding
the existence of any dispute between Lenders and any Borrower with
respect to the existence of such Event of Default.
(c) The obligations of each Guarantor hereunder are
independent of the obligations of each Borrower under the Loan
Documents and the obligations of any other guarantor of the obligations
of each Borrower under the Loan Documents, and a separate action or
actions may be brought and prosecuted against Guarantors or any of them
whether or not any action is brought against any Borrower or any of
such other guarantors and whether or not each Borrower is joined in any
such action or actions.
(d) Any Guarantor's payment of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge
such Guarantor's liability for any portion of the Guaranteed
Obligations which has not been paid. Without limiting the generality of
the foregoing, if Agent is awarded a judgment in any suit brought to
enforce any Guarantor's covenants to pay a portion of the Guaranteed
Obligations, such judgment shall not be deemed to release any Guarantor
from its covenant to pay the portion of the Guaranteed Obligations that
is not the subject of such suit.
(e) Subject to the terms of the Loan and Security Agreement,
Agent or any Lender, upon such terms as it deems appropriate, without
notice or demand and without affecting the validity or enforceability
of this Guaranty or giving rise to any reduction, limitation,
impairment, discharge or termination of any Guarantor's liability
hereunder, at any time and from time to time, may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the
time, place, manner or terms of payment of the Guaranteed Obligations,
(ii) settle, compromise, release or discharge, or accept or refuse any
offer of performance with respect to, or substitutions for, the
Guaranteed Obligations or any agreement relating thereto and/or
subordinate the payment of the same to the payment of any other
obligations; (iii) request and accept other guaranties of the
Guaranteed Obligations and take and hold security for the payment of
this Guaranty or the Guaranteed Obligations; (iv) release, surrender,
exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for
payment of the Guaranteed Obligations, any other guaranties of the
Guaranteed Obligations, including, without limitation, any Related
Guaranties or any other obligation of any Person with respect to the
Guaranteed Obligations; (v) enforce and apply any security now or
hereafter held by or for the benefit of Agent or any Lender in respect
of this Guaranty or the Guaranteed Obligations and direct the order or
manner of sale thereof, or exercise any other right or remedy that
Agent or Lenders, or any of them, may have against any such security,
as Agent in its discretion may determine consistent with the Loan and
Security Agreement and any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable, and even though such action operates to impair
or extinguish any right of reimbursement or subrogation or other right
or remedy of any Guarantor against any Borrower or any security for the
Guaranteed Obligations; and (vi) exercise any other rights available to
it under the Loan Documents.
(f) This Guaranty and the obligations of Guarantors hereunder
shall be valid and enforceable and shall not be subject to any
reduction, limitation, impairment, discharge or termination for any
reason (other than payment in full of the Guaranteed Obligations),
including without limitation
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the occurrence of any of the following, whether or not Guarantors shall
have had notice or knowledge of any of them: (i) any failure or
omission to assert or enforce or agreement or election not to assert or
enforce, or the stay or enjoining, by order of court, by operation of
law or otherwise, of the exercise or enforcement of, any claim or
demand or any right, power or remedy (whether arising under the Loan
Documents, at law, in equity or otherwise) with respect to the
Guaranteed Obligations or any agreement relating thereto, or with
respect to any other guaranty of or security for the payment of the
Guaranteed Obligations; (ii) any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the terms or
provisions (including without limitation provisions relating to events
of default) of the Loan and Security Agreement, any of the other Loan
Documents or any agreement or instrument executed pursuant thereto, or
of any other guaranty or security for the Guaranteed Obligations, (iii)
the Guaranteed Obligations, or any agreement relating thereto, at any
time being found to be illegal, invalid or unenforceable in any
respect; (iv) the application of payments received from any source
(other than payments received pursuant to the other Loan Documents or
from the proceeds of any security for the Guaranteed Obligations,
except to the extent such security also serves as collateral for
indebtedness other than the Guaranteed Obligations and such payments
are applied to such other indebtedness) to the payment of indebtedness
other than the Guaranteed Obligations, even though Agent or Lenders, or
any of them, might have elected to apply such payment to any part or
all of the Guaranteed Obligations; (v) any Lender's or Agent's consent
to the change, reorganization or termination of the corporate structure
or existence of any Borrower or any of its Subsidiaries and to any
corresponding restructuring of the Guaranteed Obligations; (vi) any
failure to perfect or continue perfection of a security interest in any
collateral which secures any of the Guaranteed Obligations; (vii) any
defenses, set-offs or counterclaims which any Borrower may allege or
assert against Agent or any Lender in respect of the Guaranteed
Obligations, including but not limited to failure of consideration,
breach of warranty, statute of frauds, statute of limitations, accord
and satisfaction and usury; and (viii) any other act or thing or
omission, or delay to do any other act or thing, which may or might in
any manner or to any extent vary the risk of any Guarantor as obligor
in respect of the Guaranteed Obligations.
2.4 WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the
benefit of Lenders and Agent:
(a) any right to require Agent or any Lender, as a condition
of payment or performance by any Guarantor, to (i) proceed against any
Borrower, any other guarantor of the Guaranteed Obligations or any
other Person, (ii) proceed against or exhaust any security held from
any Borrower, any other guarantor of the Guaranteed Obligations or any
other Person, (iii) proceed against or have resort to any balance of
any deposit account or credit on the books of Agent or any Lender in
favor of any Borrower or any other Person, or (iv) pursue any other
remedy in the power of Agent or any Lender whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of any Borrower including,
without limitation, any defense based on or arising out of the lack of
validity or the unenforceability of the Guaranteed Obligations or any
agreement or instrument relating thereto or by reason of the cessation
of the liability of any Borrower from any cause other than payment in
full of the Guaranteed Obligations;
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(c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the
principal;
(d) any defense based upon Agent's or any Lender's errors or
omissions in the administration of the Guaranteed Obligations, except
behavior which amounts to gross negligence or willful misconduct as
determined by a court of competent jurisdiction;
(e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of any Guarantor's
obligations hereunder, (ii) the benefit of any statute of limitations
affecting any Guarantor's liabilities hereunder or the enforcement
hereof, (iii) any rights to set-offs, recoupments and counterclaims,
and (iv) promptness, diligence and any requirement that Agent or any
Lender protect, secure, perfect or insure any security interest or lien
or any property subject thereto;
(f) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Guaranty, notices of default under the
Loan and Security Agreement or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the
Guaranteed Obligations or any agreement related thereto, notices of any
extension of credit to any Borrower and notices of any of the matters
referred to in subsection 2.3 and any right to consent to any thereof;
and
(g) any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Guaranty.
2.5 PAYMENT BY GUARANTORS: APPLICATION OF PAYMENTS. Subject to the
provisions of subsection 2.2(a), Guarantors hereby agree, jointly and severally,
in furtherance of the foregoing and not in limitation of any other right which
Agent or any other Person may have at law or in equity against any Guarantor by
virtue hereof, that upon the failure of any Borrower to pay any of the
Guaranteed Obligations when and as the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)),
Guarantors will forthwith pay, or cause to be paid, in cash, to Agent for the
ratable benefit of Lenders, an amount equal to the sum of the unpaid principal
amount of all Guaranteed Obligations then due as aforesaid, accrued and unpaid
interest on such Guaranteed Obligations (including, without limitation, interest
which, but for the filing of a petition in bankruptcy with respect to any
Borrower, would have accrued on such Guaranteed Obligations, whether or not a
claim is allowed against any Borrower for such interest in any such bankruptcy
proceeding) and all other Guaranteed Obligations then owed to Agent and/or
Lenders as aforesaid. All such payments shall be applied promptly from time to
time by Agent:
FIRST, to the payment of the costs and expenses of any
collection or other realization under this Guaranty and the Security
Agreement, including reasonable compensation to Agent and its agents
and counsel, and all expenses, liabilities and advances made or
incurred by Agent in connection therewith;
SECOND, to the payment of all other Guaranteed Obligations;
and
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THIRD, after payment in full of all Guaranteed Obligations, to
the payment to Guarantors, or their successors or assigns, or to
whomsoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such payments.
2.6 SUBROGATION. Until the Guaranteed Obligations shall have been paid
in full, Guarantors shall withhold exercise of (a) any right of subrogation, (b)
any right of contribution Guarantors or any of them may have against any other
guarantor of the Guaranteed Obligations, (c) any right to enforce any remedy
which Agent or any Lender now has or may hereafter have against any Borrower or
(d) any benefit of, and any right to participate in, any security now or
hereafter held by Agent or any Lender. Guarantors further agree that, to the
extent the withholding of the exercise of their rights of subrogation and
contribution as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, any rights of subrogation Guarantors or
any of them may have against any Borrower or against any collateral or security,
and any rights of contribution Guarantors or any of them may have against any
other guarantor, shall be junior and subordinate to any rights Agent or any
Lender may have against any Borrower, to all right, title and interest Agent or
any Lender may have in any such collateral or security, and to any right Agent
or any Lender may have against such other guarantor. Agent, on behalf of
Lenders, may use, sell or dispose of any item of collateral or security as it
sees fit without regard to any subrogation rights Guarantors or any of them may
have, and upon any such disposition or sale any rights of subrogation Guarantors
or any of them may have with respect to such sale or disposition shall
terminate. If any amount shall be paid to any Guarantors on account of such
subrogation rights at any time when all Guaranteed Obligations shall not have
been paid in full, such amount shall be held in trust for Agent on behalf of
Lenders and shall forthwith be paid over to Agent for the benefit of Lenders to
be credited and applied against the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of the Loan and Security Agreement or
any applicable security agreement.
2.7 SUBORDINATION OF OTHER OBLIGATIONS OF BORROWERS. Any indebtedness
of any Borrower now or hereafter held by any Guarantor is hereby subordinated in
right of payment to the Guaranteed Obligations, provided prior to an Event of
Default, Guarantors may receive ordinary course or regularly scheduled payments
of such indebtedness. Any such indebtedness of any Borrower to any Guarantor
collected or received by such Guarantor after an Event of Default has occurred
and is continuing shall be held in trust for Agent on behalf of Lenders and
shall forthwith be paid over to Agent for the benefit of Lenders to be credited
and applied against the Guaranteed Obligations but without affecting, impairing
or limiting in any manner the liability of Guarantors under any other provision
of this Guaranty.
2.8 EXPENSES. Each Guarantor, jointly and severally, agrees to pay, or
cause to be paid, and to save Agent and Lenders harmless against liability for,
any and all reasonable costs and expenses (including reasonable fees and
disbursements of counsel and allocated costs of internal counsel) incurred or
expended by Agent or any Lender in connection with the enforcement of or
preservation of any rights under this Guaranty.
2.9 CONTINUING GUARANTY. This Guaranty is a continuing guaranty and
shall remain in effect until all of the Guaranteed Obligations shall have been
paid in full and the Revolving Credit Loan and Acquisition Loan Commitments
shall have terminated.
2.10 FINANCIAL CONDITION OF BORROWERS. Any Loans may be granted to any
Borrower or continued from time to time without notice to or authorization from
Guarantors regardless of the financial or other
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condition of any Borrower at the time of any such grant or continuation. Lenders
and Agent shall have no obligation to disclose or discuss with any Guarantor
their assessment, or any Guarantor's assessment, of the financial condition of
any Borrower. Guarantors have adequate means to obtain information from each
Borrower on a continuing basis concerning the financial condition of each
Borrower and its ability to perform its obligations under the Loan Documents,
and Guarantors assume the responsibility for being and keeping informed of the
financial condition of each Borrower and of all circumstances bearing upon the
risk of nonpayment of the Guaranteed Obligations. Each Guarantor hereby waives
and relinquishes any duty on the part of Agent or any Lender to disclose any
matter, fact or thing relating to the business, operations or conditions of each
Borrower now known or hereafter known by Agent or any Lender.
2.11 RIGHTS CUMULATIVE. The rights, powers and remedies given to
Lenders and Agent by this Guaranty are cumulative and shall be in addition to
and independent of all rights, powers and remedies given to Lenders and Agent by
virtue of any statute or rule of law or in any of the other Loan Documents or
any agreement between any Guarantor and Lenders and/or Agent or between
Borrowers and Lenders and/or Agent. Any forbearance or failure to exercise, and
any delay by any Lender or Agent in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be construed to be
a waiver thereof, nor shall it preclude the further exercise of any such right,
power or remedy.
2.12 BANKRUPTCY: POST-PETITION INTEREST: REINSTATEMENT OF GUARANTY.
(a) So long as any Guaranteed Obligations remain outstanding,
no Guarantor shall, without the prior written consent of Agent in
accordance with the terms of the Loan and Security Agreement, commence
or join with any other Person in commencing any bankruptcy,
reorganization or insolvency proceedings of or against any Borrower.
The obligations of each Guarantor under this Guaranty shall not be
reduced, limited, impaired, discharged, deferred, suspended or
terminated by any proceeding, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization, liquidation or
arrangement of any Borrower or by any defense which any Borrower may
have by reason of the order, decree or decision of any court or
administrative body resulting from any such proceeding.
(b) Guarantors acknowledge and agree that any interest on any
portion of the Guaranteed Obligations which accrues after the
commencement of any proceeding referred to in clause (a) above (or, if
interest on any portion of the Guaranteed Obligations ceases to accrue
by operation of law by reason of the commencement of said proceeding,
such interest as would have accrued on such portion of the Guaranteed
Obligations if said proceedings had not been commenced) shall be
included in the Guaranteed Obligations because it is the intention of
Guarantors and Agent that the Guaranteed Obligations which are
guaranteed by Guarantors pursuant to this Guaranty should be determined
without regard to any rule of law or order which may relieve any
Borrower of any portion of such Guaranteed Obligations. Guarantors will
permit any trustee in bankruptcy, receiver, debtor in possession,
assignee for the benefit of creditors or similar person to pay Agent,
or allow the claim of Agent in respect of, any such interest accruing
after the date on which such proceeding is commenced.
(c) In the event that all or any portion of the Guaranteed
Obligations are paid by any Borrower, the obligations of each Guarantor
hereunder shall continue and remain in full force and effect or be
reinstated, as the case may be, in the event that all or any part of
such payment(s) are rescinded or recovered directly or indirectly from
Lender as a preference, fraudulent transfer or
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otherwise, and any such payments which are so rescinded or recovered
shall constitute Guaranteed Obligations for all purposes under this
Guaranty.
2.13 NOTICE OF EVENTS. As soon as any Guarantor obtains knowledge
thereof, and to the extent a Borrower who had such knowledge would be required
to do so under any Loan Document, such Guarantor shall give Agent written notice
of any condition or event which has resulted or might reasonably be expected to
result in (a) a material adverse change in the financial condition of any
Guarantor or any Borrower, or (b) a breach of or noncompliance with any term,
condition or covenant contained herein or in the Loan and Security Agreement,
any other Loan Document or in any document delivered pursuant hereto or thereto,
or (c) a material breach of, or material noncompliance with, any material term,
condition or covenant of any material contract to which any Guarantor or any
Borrower are a party or by which any Guarantor or any Borrower or any
Guarantor's or any Borrower's property may be bound.
2.14 SET OFF. In addition to any other rights any Lender or Agent may
have under law or in equity, if any amount shall at any time be due and owing by
any Guarantor to Agent under this Guaranty, such Lender or Agent is authorized
at any time or from time to time, without notice (any such notice being hereby
expressly waived), to set off and to appropriate and to apply any and all
deposits (general or special, including but not limited to indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness of any Lender or Agent owing to such Guarantor and any other
property of such Guarantor held by any Lender or Agent to or for the credit or
the account of such Guarantor against and on account of the Guaranteed
Obligations and liabilities of such Guarantor to any Lender or Agent under this
Guaranty. After exercising any right to set off, appropriate or apply any
deposits or other indebtedness of any Guarantor, the Agent or Lender exercising
such right shall endeavor to provide notice of such set off, appropriation or
application to such Guarantor promptly, but any failure to do so shall not
affect the validity of any such set off, appropriation or application.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders and Agent to accept this Guaranty and to
enter into the Loan and Security Agreement and to make the Loans thereunder,
Guarantors hereby, jointly and severally, represent and warrant to Lenders and
Agent that the following statements are true and correct:
3.1 CORPORATE EXISTENCE. Each Guarantor is duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
has the corporate power to own its assets and to transact the business in which
it is now engaged and is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification.
3.2 CORPORATE POWER: AUTHORIZATION: ENFORCEABLE OBLIGATIONS. Each
Guarantor has the corporate power, authority and legal right to execute, deliver
and perform this Guaranty, the Security Agreement and all other Loan Documents
to which such Guarantor is a party (all such agreements herein collectively
referred to as the "GUARANTOR AGREEMENTS") and all obligations required under
the Guarantor Agreements and has taken all necessary corporate action to
authorize the Guarantor Agreements on the terms and conditions of such
agreements and its execution, delivery and performance of the Guarantor
Agreements and all obligations required under such agreements. No consent of any
other Person including, without limitation, stockholders and creditors of any
Guarantor, and no license, permit, approval or authorization of, exemption by,
notice or
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report to, or registration, filing or declaration with, any governmental
authority is required by any Guarantor in connection with the Guarantor
Agreements or the execution, delivery, performance, validity or enforceability
of the Guarantor Agreements and the obligations required under such agreements
except for (i) such consents which have been validly obtained, or (ii) in the
case of any leasehold interest of any Guarantor, such Guarantor has used
commercially reasonable efforts to obtain any such consent and the failure of
any Guarantor to obtain any such consent is the result of the exercise by a
landlord of such landlord's existing contractual right to withhold such consent.
The Guarantor Agreements have been, and each instrument or document required in
connection with such agreements will be, executed and delivered by a duly
authorized officer of each Guarantor, and the Guarantor Agreements constitute,
and each instrument or document required in connection therewith when executed
and delivered will constitute, the legally valid and binding obligation of
Guarantors, enforceable against Guarantors in accordance with their respective
terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws or equitable
principles relating to or limiting creditors' rights generally.
3.3 NO LEGAL BAR TO THIS GUARANTY. The execution, delivery and
performance of the Guarantor Agreements and the documents or instruments
required in connection therewith, and the use of the proceeds of the borrowings
under the Loan and Security Agreement, will not violate any provision of any
existing law or regulation binding on any Guarantor, or any order, judgment,
award or decree of any court, arbitrator or governmental authority binding on
any Guarantor, or the certificate of incorporation or bylaws of any Guarantor or
any securities issued by any Guarantor, or any mortgage, indenture, lease,
contract or other agreement, instrument or undertaking to which any Guarantor is
a party or by which any Guarantor or any of its assets may be bound, the
violation of which would have a material adverse effect on the business,
operations, assets or financial condition of any Guarantor and will not result
in, or require, the creation or imposition of any Lien on any of its property,
assets or revenues pursuant to the provisions of any such mortgage, indenture,
lease, contract or other agreement, instrument or undertaking.
3.4 BENEFIT TO GUARANTORS. Each of the Guarantors is a subsidiary of
Holdings or a subsidiary of a subsidiary of Holdings, and the respective boards
of directors and managers of each Guarantor has determined, as evidenced by
resolution duly adopted and in full force and effect on the date hereof, that
such Guarantor will receive direct and indirect benefit from the transactions
contemplated by the Loan and Security Agreement in an amount at least equal to
the obligations of Guarantors under this Guaranty, and that loans to each
Borrower produce direct financial benefits to each of the Guarantors. Therefore,
the value of the consideration received and to be received by each Guarantor as
a result of such Guarantor's entering into this Guaranty and each of the other
Loan Documents to which it is a party is reasonably worth at least as much as
the liability and obligations of Guarantors hereunder and under the other Loan
Documents to which each Guarantor is a party and such liability and obligations
have benefitted and may reasonably be expected to benefit each Guarantor
directly.
SECTION 4. COVENANTS.
Each Guarantor covenants and agrees that, unless and until all of the
Guaranteed Obligations shall have been paid in full and the Revolving Credit
Loan and Acquisition Loan Commitments shall have terminated, unless Agent shall
otherwise consent in writing:
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4.1 CORPORATE EXISTENCE, ETC. Each Guarantor shall at all times
preserve and keep in full force and effect its corporate existence and all
rights and franchises material to its business, except as may be expressly
provided in the Loan and Security Agreement.
4.2 COMPLIANCE WITH LAWS, ETC. Each Guarantor shall comply in all
material respects with all applicable laws, rules, regulations and orders, such
compliance to include, without limitation, paying when due all taxes,
assessments and governmental charges imposed upon it or upon any of its
properties or assets or in respect of any of its franchises, businesses, income
or property before any penalty or interest accrues thereon unless such tax,
assessment or charge is being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and such Guarantor has established
such reserve or other appropriate provision, if any, as shall be required in
conformity with general accepted accounting principals; PROVIDED THAT each
Guarantor shall in any event pay such taxes, assessments and governmental
charges not later than five (5) days prior to the date of any proposed sale
under any judgment, writ or warrant of attachment entered or filed against such
Guarantor as a result of the failure to make such payment.
4.3 BOOKS AND RECORDS. Each Guarantor shall keep and maintain books of
record and account with respect to its operations in accordance with generally
accepted accounting principles and shall permit Agent or any Lender and their
respective officers, employees and authorized agents to examine, copy and make
excerpts from the books and records of Guarantors and their Subsidiaries and to
inspect the properties of Guarantors and their Subsidiaries, both real and
personal, at such reasonable times as Agent may request.
4.4 REPORTING REQUIREMENTS. Each Guarantor will assist Borrowers in
delivering the financial statements and other reports required by subsection
8.1.3 of the Loan and Security Agreement and otherwise assist Borrowers in
complying with the provisions of the Loan and Security Agreement applicable to
Guarantors.
SECTION 5. MISCELLANEOUS
5.1 SURVIVAL OF WARRANTIES. All agreements, representations and
warranties made herein shall survive the execution and delivery of this Guaranty
and the execution and delivery of the Notes.
5.2 NOTICES. Any communications between Agent and/or the Lenders and
Guarantors and any notices or requests provided herein to be given may be given
by mailing the same, postage prepaid, or by telex, facsimile transmission or
cable to each such party at its address set forth in or determined pursuant to
the Loan and Security Agreement, on the signature pages hereof or to such other
addresses as each such party may in writing hereafter indicate. Any notice,
request or demand to or upon Agent or Lenders or Guarantors shall not be
effective until received.
5.3 SEVERABILITY. In case any provision in or obligation under this
Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
5.4 AMENDMENTS AND WAIVERS. No amendment, modification, termination or
waiver of any provision of this Guaranty, or consent to any departure by any
Guarantor therefrom, shall in any event be
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effective unless in writing and signed by Agent. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
5.5. HEADINGS. Section and subsection headings in this Guaranty are
included herein for convenience of reference only and shall not constitute a
part of this Guaranty for any other purpose or be given any substantive effect.
5.6 APPLICABLE LAW. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
GUARANTORS, AGENT AND LENDERS HEREUNDER AND ALL OTHER ASPECTS HEREOF SHALL BE
DEEMED TO BE MADE UNDER, SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE.
5.7 SUCCESSORS AND ASSIGNS; RELIANCE BY LENDER. This Guaranty is a
continuing guaranty and shall be binding upon Guarantors and their respective
successors and assigns. This Guaranty shall inure to the benefit of Agent,
Lenders and their respective successors and assigns, including, without
limitation, any subsequent holder of all or any part of the Obligations. No
Guarantor shall assign this Guaranty nor any of the rights or obligations of
such Guarantor hereunder without the prior written consent of Agent and all
Lenders. Lender may, without notice or consent, assign its interest in this
Guaranty in whole or in part as part of a sale or other transfer of the Notes,
or any one or more of them, and/or all or any portion of its interest in the
Loans (whether by direct transfer, transfer of a participation interest, or
otherwise). The terms and provisions of this Guaranty shall inure to the benefit
of any assignee or transferee of any Note and/or any interest in any of the
Loans, and in the event of such transfer or assignment the rights and privileges
herein conferred upon Lenders and Agent shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
hereof.
5.8 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST GUARANTORS OR ANY OF THEM ARISING OUT OF OR RELATING
TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT TO WHICH ANY GUARANTOR IS A PARTY
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION LOCATED
IN THE STATE OF TEXAS AND BY EXECUTION AND DELIVERY OF THIS GUARANTY GUARANTORS
ACCEPT FOR THEMSELVES AND IN CONNECTION WITH THEIR PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND EACH
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY AND/OR ANY OTHER
LOAN DOCUMENT TO WHICH SUCH GUARANTOR IS A PARTY. Guarantors hereby agree that
service of process sufficient for personal jurisdiction in any action against
any Guarantor in the State of Texas may be made by registered or certified mail,
return receipt requested, to each Guarantor in accordance with subsection 5.2,
and Guarantors hereby acknowledge that such service shall be effective and
binding in every respect. Nothing herein shall affect the right to serve process
in any other manner permitted by law or shall limit the right of Agent or any
Lender to bring proceedings against any Guarantor in the courts of any other
jurisdiction.
5.9 WAIVER OF TRIAL BY JURY. EACH GUARANTOR AND, BY ITS ACCEPTANCE OF
THE BENEFITS HEREOF, AGENT AND EACH LENDER HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
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OUT OF THIS GUARANTY, THE SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT TO WHICH
ANY GUARANTOR IS A PARTY. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Guarantors and, by their acceptance of the benefits hereof,
Agent and the Lenders each (i) acknowledge that this waiver is a material
inducement for Guarantors, Agent and Lenders to enter into a business
relationship, that Guarantors, Agent and Lenders have already relied on this
waiver in entering into this Guaranty and the Security Agreement or accepting
the benefits thereof, as the case may be, and that each will continue to rely on
this waiver in their related future dealings and (ii) further warrants and
represents that each has reviewed this waiver with its legal counsel, and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY,
THE SECURITY AGREEMENT AND ANY OTHER LOAN DOCUMENT TO WHICH ANY GUARANTOR IS A
PARTY. In the event of litigation, this Guaranty may be filed as a written
consent to a trial by the court.
5.10 NO OTHER WRITING. This writing is intended by Guarantors, Agent,
and Lenders as the final expression of this Guaranty and is also intended as a
complete and exclusive statement of the terms of their agreement with respect to
the matters covered hereby. No course of dealing, course of performance or trade
usage, and no parol evidence of any nature, shall be used to supplement or
modify any terms of this Guaranty.
There are no conditions to the full effectiveness of this Guaranty.
5.11 FURTHER ASSURANCES. At any time or from time to time, upon the
request of Agent, each Guarantor shall execute and deliver such further
documents and do such other acts and things as Agent or may reasonably request
in order to effect fully the purposes of this Guaranty.
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, Guarantors have executed this Guaranty by their
duly authorized officer as of the date first above written.
THE XXXXX GROUP, INCORPORATED,
a Florida corporation
By:
---------------------------------------
Xxxxx Xxxx
Vice President
Address: Xxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxx 00000
Telecopy No.: 000-000-0000
RAMSAY YOUTH SERVICES PUERTO RICO, INC.,
a Puerto Rico corporation
By:
---------------------------------------
Xxxxx Xxxx
Vice President
Address: Xxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxx 00000
Telecopy No.: 000-000-0000
Accepted by:
FLEET CAPITAL CORPORATION,
a Rhode Island corporation
By:
Name:
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Title:
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