VSC TERM GUARANTY
REFERENCE IS HEREBY MADE to the Term Loan Agreement dated the date
hereof (which, as the same may hereafter be amended from time to time, will be
called herein the "Term Loan Agreement") among IVC Industries, Inc., a Delaware
corporation (the "Borrower"), the Banks party thereto, and The Chase Manhattan
Bank, as Agent. All capitalized terms used herein and not defined shall have the
respective meanings ascribed to them in the Term Loan Agreement.
WHEREAS, the Term Loan Agreement provides for the extension of
credit by the Banks to the Borrower; and
WHEREAS, all the obligations and liabilities (whether now existing
or hereafter arising) of the Borrower to any or all of the Agent and the Banks
under the Term Loan Agreement or any of the other Term Loan Documents (whether
for principal, interest, fees, reimbursement obligations, indemnification
obligations, costs of enforcement or otherwise) will be called herein the
"Obligations"; and
WHEREAS, Vitamin Specialties Corp., a Pennsylvania corporation (the
"Guarantor"), expects to obtain substantial economic benefit from the extension
of credit by the Banks to the Borrower under the Term Loan Agreement; and
WHEREAS, the execution and delivery of this guaranty by the
Guarantor is required in order to induce the Banks and the Agent to enter into
the Term Loan Agreement.
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and to induce the Banks and the
Agent to enter into the Term Loan Agreement, the Guarantor hereby agrees with
the Banks and the Agent as follows:
1. The Guarantor hereby absolutely and unconditionally guarantees to
the Agent and the Banks that the Borrower will promptly pay, perform and observe
all the Obligations, and that all sums stated to be payable in, or which become
payable under, the Term Loan Documents by the Borrower will be promptly paid in
full when due, whether at stated maturity or earlier by reason of acceleration
or otherwise, and, in the case of one or more extensions of time of payment or
performance or renewals of any Obligation, that the same will be promptly paid
or performed (as the case may be) when due according to such extension or
renewal, whether at stated maturity or earlier by reason of acceleration or
otherwise, irrespective of the validity, regularity, or enforceability of any of
the Term Loan Documents and irrespective of any present or future law or order
of any government (whether of right or in fact and whether the Agent or any Bank
shall have consented thereto) or of any agency thereof purporting to reduce,
amend, restructure or otherwise affect any Obligation of the Borrower or other
obligor or to vary the terms of payment; provided, however, that the liability
of the Guarantor hereunder with respect to the Obligations shall not exceed at
any time 90% of Adjusted Net Worth (as hereinafter
defined) of the Guarantor. The term "Adjusted Net Worth" of the Guarantor means
the current Net Worth of the Guarantor, plus (as and when Net Worth increases)
any increase in such amount of Net Worth after the date hereof (without any
decrease for any reduction after the date hereof in current Net Worth as so
increased). The term "Net Worth" of the Guarantor means the amount of all assets
of the Guarantor, at a fair valuation, less the total liabilities of the
Guarantor (including contingent liabilities other than the liabilities of the
Guarantor under this guaranty) .
2. The Guarantor agrees that, as among the Guarantor, the Agent and
the Banks, the Obligations may be declared to be due and payable for purposes of
this guaranty notwithstanding any stay, injunction or other prohibition which
may prevent, delay or vitiate any such declaration as against the Borrower and
that, in the event of any such declaration (or attempted declaration), such
Obligations (whether or not due and payable by the Borrower) shall forthwith
become due and payable by the Guarantor for purposes of this guaranty. The
Guarantor further guarantees that all payments made by the Borrower to the Agent
and the Banks of any Obligation will, when made, be final and agree that if any
such payment is recovered from, or repaid by, the Agent or any Bank in whole or
in part in any bankruptcy, insolvency or similar proceeding instituted by or
against the Borrower, this guaranty shall continue to be fully applicable to
such Obligation to the same extent as though the payment so recovered or repaid
had never been originally made on such Obligation.
3. This is a guaranty of payment and not of collection only.
4. The Guarantor hereby consents that from time to time, without
notice to or further consent of the Guarantor, the payment, performance or
observance of any or all of the Obligations may be waived or the time of payment
or performance thereof extended or accelerated, or renewed in whole or in part,
or the terms of the Term Loan Documents or any part thereof may be changed and
any collateral therefor may be exchanged, surrendered or otherwise dealt with as
the Agent may determine, and any of the acts mentioned in the Term Loan
Documents may be done, all without affecting the liability of the Guarantor
hereunder. The Guarantor hereby waives presentment of any instrument, demand of
payment, protest and notice of non-payment or protest thereof or of any
exchange, sale, surrender or other handling or disposition of such collateral,
and any requirement that the Agent or any Bank exhaust any right, power or
remedy or proceed against the Borrower under the Term Loan Documents or against
any other person under any other guaranty of, or security for, any of the
Obligations. The Guarantor hereby further waives any defense whatsoever which
might constitute a defense available to, or discharge of, the Borrower or a
guarantor. No payment by the Guarantor pursuant to any provision hereunder shall
entitle the Guarantor, by subrogation to the rights of the Agent or any Bank or
otherwise, to any payment by the Borrower (or out of the property of the
Borrower) except after payment in full of all sums (including interest, costs
and expenses) which may be or become payable by the Borrower to the Agent and
the Banks at any time or from time to time; provided, however, if the Guarantor
is an "insider" of the Borrower, as such term is defined in Section 101 of the
Federal Bankruptcy Code, the Guarantor hereby irrevocably waives any and all
rights to which it may be entitled, by operation of law or otherwise, upon
making any payment hereunder to be subrogated to the rights of the
Agent and the Banks against the Borrower with respect to such payment or
otherwise to be reimbursed, indemnified or exonerated by the Borrower in respect
thereof.
5. This guaranty shall be a continuing guaranty, and any other
guarantor, and any other party liable upon or in respect of any Obligation
hereby guaranteed may be released without affecting the liability of the
Guarantor. The liability of the Guarantor hereunder shall be joint and several
with the liability of any other guarantor or other party upon or in respect of
the Obligations.
6. The Agent or any Bank may assign its rights and powers hereunder,
with all or any of the Obligations, and, in the event of such assignment, the
assignee hereof or of such rights and powers, shall have the same rights and
remedies as if originally named herein.
7. Notice of acceptance of this guaranty and of the incurring of any
and all of the Obligations of the Borrower pursuant to the Term Loan Documents
is hereby waived. This guaranty and all rights, obligations and liabilities
arising hereunder shall be governed by and construed according to the laws of
the State of New York. Unless the context otherwise requires, all terms used
herein which are defined in the Uniform Commercial Code shall have the meanings
therein stated.
8. The Guarantor represents and warrants that:
(a) The present fair saleable value of the assets of the
Guarantor after giving effect to all the transactions contemplated by the Term
Loan Documents (including this guaranty) and the execution and delivery by the
Guarantor of the VSC Revolver Guaranty dated the date hereof and the funding of
all Commitments exceeds the amount that will be required to be paid on or in
respect of the existing debts and other liabilities (including contingent
liabilities) of the Guarantor as they mature.
(b) The property of the Guarantor does not constitute
unreasonably small capital for the Guarantor to carry out its business as now
conducted and as proposed to be conducted including the capital needs of the
Guarantor.
(c) The Guarantor does not intend to, nor does it believe that
it will, incur debts beyond its ability to pay such debts as they mature (taking
into account the timing and amounts of cash to be received by the Guarantor, and
of amounts to be payable on or in respect of debt of the Guarantor). The cash
available to the Guarantor after taking into account all other anticipated uses
of the cash of the Guarantor, is anticipated to be sufficient to pay all such
amounts on or in respect of debt of the Guarantor when such amounts are required
to be paid.
(d) The Guarantor does not believe that final judgments
against it in actions for money damages will be rendered at a time when, or in
an amount such that, the Guarantor will be unable to satisfy any such judgments
promptly in accordance with their terms (taking into account the maximum
reasonable amount of such judgments in any such actions and the earliest
reasonable time at which such judgments might be rendered). The cash available
to the Borrower after taking into account all other anticipated uses of
the cash of the Borrower (including the payments on or in respect of debt
referred to in paragraph (c) of this Section), is anticipated to be sufficient
to pay all such judgments promptly in accordance with their terms.
9. The Guarantor agrees that, in addition to (and without limitation
of) any right of setoff, banker's lien or counterclaim the Agent or any Bank may
otherwise have, each of the Agent and each Bank shall be entitled, at its
option, to setoff and apply balances (general or special, time or demand,
provisional or final) held by it for account of the Guarantor at any of its
offices in dollars or in any other currency, against any amounts owing hereunder
that are not paid when due (regardless of whether such balances are then due to
the Guarantor), in which case it shall promptly notify the Guarantor thereof;
provided however that any failure to give such notice shall not affect the
validity thereof.
10. No provision of this guaranty may be modified or waived without
the prior written consent of the Agent and the Required Banks.
11. The Guarantor hereby irrevocably submits to the jurisdiction of
any New York State court or Federal court sitting in New York City and New
Jersey State court or Federal court sitting in New Jersey in any action or
proceeding arising out of or relating to this guaranty, and the Guarantor hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such New York State or New Jersey State or Federal
court. The Guarantor irrevocably consents to the service of any and all process
in any such action or proceeding by the mailing of copies of such process to the
Guarantor at its address specified on the signature page hereof. The Guarantor
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this paragraph shall affect the
rights of the Agent and the Banks to serve legal process in any other manner
permitted by law or affect the rights of the Agent and the Banks to bring any
action or proceeding against the Guarantor or any of its property in the courts
of any other jurisdiction. To the extent that the Guarantor has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
(whether from service or notice, attachment prior to judgment, attachment in aid
of execution, execution or otherwise) with respect to itself or its property,
the Guarantor hereby irrevocably waives such immunity in respect of its
Obligations under this guaranty. The Guarantor hereby expressly waives any and
every right to a trial by jury in any action on or related to this guaranty, the
Obligations or the enforcement of either or all of the same, and does further
expressly waive any and every right to interpose any counterclaim in any such
action or proceeding.
12. The Guarantor agrees to reimburse the Agent and the Banks on
demand for all reasonable costs, expenses, and charges (including, without
limitation, reasonable attorneys' fees) incurred by the Agent or the Banks in
connection with any enforcement of this guaranty.
13. The rights, powers and remedies granted to the Agent and the
Banks herein shall be cumulative and in addition to any rights, powers and
remedies to which the Agent and the Banks may be entitled either by operation of
law or pursuant to the Term Loan Documents or any other document or instrument
delivered or from time to time to be delivered to the Agent or any Bank in
connection with the Term Loan Documents.
IN WITNESS WHEREOF, the Guarantor has caused this instrument to be
duly executed by their proper officers this 1st day of May, 1998.
WITNESS: VITAMIN SPECIALTIES CORP.
/s/ Xxx X. Xxxxxxx By: /s/ I. Xxxx Xxxxxxxxxx
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Name: Name:
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Title:
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Address of Guarantor:
000 Xxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
