EXHIBIT 10.31
GUARANTY AND SURETYSHIP AGREEMENT
FOR VALUE RECEIVED and intending to be legally bound, in consideration
of credit given, or to be given, advances made or to be made, or other
financial accommodations from time to time afforded or to be afforded to the
Borrower (as hereinafter defined), the undersigned (the "Guarantor"), as of
this 31st day of January, 2002, hereby, unconditionally and irrevocably
guarantees and becomes surety to Bank of America, N.A., its successors and
assigns ("Bank"), for the due and punctual payment and performance of the
Obligations (as hereinafter defined), as and when such payment or performance
shall respectively become due, payable, and/or performed in accordance with the
terms of the Obligations, whether at maturity or by declaration, acceleration,
or otherwise. This Agreement is executed and delivered pursuant to the Loan
Agreement (as hereinafter defined). Capitalized terms not otherwise defined
herein shall have the meanings ascribed to such terms in the Loan Agreement.
I. DEFINITIONS
As used herein, the following terms shall have the indicated meanings:
"Agreement" means this Guaranty and Suretyship Agreement and all
modifications, renewals, extensions, and amendments hereto.
"Borrower" means Symbion, Inc., a Tennessee corporation.
"Collateral" means the collateral securing, or which may in the future
secure the Obligations.
"Loan Agreement" means that certain Loan Agreement of even date
herewith, among the Borrower, Bank and Guarantor, together with any amendments,
renewals, extensions, or restatements thereof.
"Note" means the Promissory Note of even date herewith, in the
original principal amount of $1,960,000, made by Borrower and payable to Bank,
together with all amendments, renewals and extensions thereof.
"Obligations" means and includes (i) all indebtedness of the Borrower
to Bank evidenced by the Note, and all other indebtedness of the Borrower to
Bank, whether such indebtedness is direct or indirect, absolute or contingent,
joint or several, together with any and all indebtedness created or incurred
under any extension, renewal, refinancing, or refunding of such indebtedness in
whole or in part, whether on account of principal, interest, or otherwise
(including, without limitation, any interest which accrues after the
commencement of any case, proceeding, or other action relating to the
bankruptcy, insolvency, or reorganization of the Borrower), (ii) payment,
performance, and discharge of all other obligations of
the Borrower under the Loan Documents, (iii) all costs and expenses, including
without limitation reasonable attorneys' fees, incurred by Bank in the
collection or attempted collection of any indebtedness included in the
Obligations, and in the administration of the Obligations, and (iv) all future
advances made by Bank for the maintenance, preservation, protection, or
enforcement of, or realization upon, the property subjected and intended to be
subjected to the lien and security interest in the Collateral, or any portion
thereof, including without limitation advances for storage, transportation
charges, taxes, insurance, repairs, and the like.
II. COVENANTS
1. The obligations of Guarantor under this Agreement shall be
continuing, absolute, and unconditional and shall remain in full force and
effect without regard to, and shall not be released, discharged, or in any way
affected by: (1) any amendment, extension, modification of, or supplement to
the Loan Documents, including without limitation an increase in the principal
indebtedness evidenced by the Note; (2) any exercise or nonexercise of or delay
in exercising any right, remedy, power, or privilege under or in respect of
this Agreement, the Loan Agreement, or any of the other Loan Documents (even if
any such right, remedy, power, or privilege shall be lost thereby), or any
waiver, consent, indulgence, or other action or inaction in respect thereof;
(3) any lack of diligence, failure, neglect, or omission on the part of Bank to
make any demand or protest or to give any notice of dishonor or default; (4)
any failure or omission of Bank to realize upon or protect any of the
Collateral, to exercise or enforce any lien upon the Collateral, or to exercise
any right of set-off; (5) any bankruptcy, insolvency, arrangement, composition,
assignment for the benefit of creditors, or similar proceeding commenced by or
against the Borrower or Guarantor; (6) any failure to perfect or continue
perfection of, or any release or waiver of, any rights given to Bank with
respect to any property as security for the performance of any of the
Borrower's or Guarantor's obligations under the Loan Agreement, the Note, or
any other Loan Document; (7) any extension of time for payment or performance
of any of the Obligations; (8) dissolution (voluntarily or involuntarily) of
Guarantor; (9) the genuineness, validity, or enforceability of the Loan
Documents; (10) any limitation of liability of the Borrower or Guarantor
contained in the Loan Documents; (11) any defense that may arise by reason of
the failure of Bank to file or enforce a claim against the Borrower or
Guarantor in any bankruptcy or other proceeding; (12) the voluntary or
involuntary liquidation, dissolution, sale of all or substantially all of the
property of the Borrower or Guarantor, the marshalling of assets and
liabilities, or other similar proceeding affecting the Borrower or any of their
respective assets; (13) the release of Borrower or Guarantor from the
performance or observance of any of the agreements, covenants, terms, or
conditions contained in the Loan Documents by operation of law; (14) the
release or discharge of any other surety or guarantor of the Obligations; or
(15) any other circumstances which might otherwise constitute a legal or
equitable discharge of, or defense available to, a guarantor or surety.
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2. Guarantor agrees that so long as this Agreement is in effect
Guarantor will maintain Guarantor's corporate existence and will not dissolve
or otherwise dispose of all or substantially all of Guarantor's assets.
III. WAIVERS
1. Guarantor hereby waives and agrees not to exercise any rights
which it may acquire by way of subrogation or reimbursement under this Guaranty
as a result of any payment made hereunder or otherwise.
2. Guarantor hereby waives (a) any presentment for payment,
notice of nonpayment, demand, protest, or notice of acceptance of this
Agreement, (b) any right to notice of advances made to Borrower from time to
time under the provisions of the Loan Documents, and (c) any notice of any
matters described or referred to in Article II above; provided, however, that
Guarantor does not waive any rights prior to default that, pursuant to Section
9-602 of the Revised Article 9, may not be waived.
3. Guarantor hereby further waives any and all notice of every
kind to which Guarantor might otherwise be entitled with respect to the
incurring of any further or increased obligation or liability by the Borrower
to Bank, the demand for payment or the payment of all or any obligations or
liabilities of the Borrower or Guarantor to Bank (whether now existing or
hereafter arising) or the presentment of any instrument for payment at any time
in connection with any obligation or liability of the Borrower or Guarantor or
the protest or nonpayment thereof. Guarantor hereby further waives, surrenders,
and agrees not to claim or enforce (i) any right to be subrogated in whole or
in part of any right or claim of Bank against the Borrower or Guarantor arising
under the Loan Documents or any other collateral given to Bank as security for
the payment or performance of the Obligations and (ii) any right to require the
marshalling of any assets of the Borrower or Guarantor, which right of
subrogation or marshalling might otherwise arise from any partial payment of
the Obligations by Guarantor. Guarantor hereby further waives all applicable
statutes of limitation which may exist at any time in favor of Guarantor.
IV. REPRESENTATIONS AND WARRANTIES
Guarantor represents, warrants, and covenants to and with Bank that:
1. Guarantor acknowledges that this Agreement is necessary to
induce Bank to advance the credit for the Obligations and Guarantor is willing
and able to deliver this Agreement because Guarantor will receive direct and
material benefit from Bank's extension of credit to Borrower.
2. Guarantor is now and will be completely familiar with the
business, operations, and condition of Borrower and Guarantor hereby waives and
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relinquishes any duty on the part of Bank to disclose any matter, fact, or
thing relating to the business, operation, or condition of Borrower now known
or hereafter known by Bank.
V. DEFAULT AND ENFORCEMENT
1. In addition to all liens upon and rights of set-off against
moneys, securities, or other property of Guarantor given to Bank by law or
equity, Bank shall have a lien upon, security interest in, and right of
immediate set-off against all moneys, instruments, notes, bonds, commercial
paper, securities, and other property of Guarantor now or hereafter in the
possession of or on deposit with Bank, whether held in a general or special
account for deposit, safe-keeping, or otherwise. Every such lien and right of
set-off may be exercised after the occurrence of an Event of Default under the
Loan Agreement (and expiration of all notice and cure periods), or a default by
Guarantor under this Agreement, and expiration of applicable cure periods,
without further notice or demand to Guarantor, and Bank may sell or cause to be
sold, at public or private sale, in any manner and place which may be lawful,
for cash or credit and upon such terms as Bank may see fit, and without demand
or notice to Guarantor, all or any of such property, and Bank or any other
person may purchase such property, rights, or interests so sold and thereafter
hold the same free of any claim or right of whatsoever kind, including any
right of equity or redemption of Guarantor, such demand, notice, or right of
equity or redemption being hereby expressly waived and released.
2. Each and every right, remedy, and power hereby granted to
Bank or allowed it by law or other agreement shall be cumulative and not
exclusive of any other, and may be exercised by Bank at any time and from time
to time. In the event that the Obligations exceed in any respect any amount by
which this Agreement may be limited, any payments by Borrower, or any
collections or recovery by Bank from any sources other than this Agreement, may
be applied first by Bank to any portion of the Obligations which exceeds the
limits of this Agreement.
3. Notwithstanding anything contained in this Agreement or in
the Loan Documents to the contrary, Guarantor shall be in default under this
Agreement upon the occurrence of an Event of Default under the Loan Agreement
(and expiration of applicable cure periods). Upon the occurrence of any such
default, Bank may, at its option, accelerate the indebtedness evidenced and
secured by the Loan Documents.
4. This shall be an agreement of suretyship as well as of
guaranty, and Bank may proceed directly against Guarantor whenever any payment
or performance required pursuant to the Obligations is not made or rendered to
Bank without being required to make demand upon or proceed first against the
Borrower or any other person or entity, or against any security for Borrower'
or Guarantor's
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Obligations under the Loan Documents or hereunder, or exhaust its remedies
against Borrower or any other surety or guarantor. It is expressly agreed that
Bank may at any time following an Event of Default under the Loan Agreement or
a default by Guarantor hereunder, make demand for payment on, or bring a claim
against, Guarantor.
5. If Bank employs counsel to enforce this Agreement by suit or
otherwise, Guarantor will reimburse Bank, upon demand, for all expenses
incurred in connection therewith (including, without limitation, reasonable
attorneys' fees), whether or not suit is actually instituted.
6. Guarantor irrevocably: (a) agrees that Bank or any other
holder or holders of the Note may bring suit, action, or other legal
proceedings arising out of this Guaranty or the transactions contemplated
hereby in the courts of the State of Tennessee, sitting in Nashville, Davidson
County, Tennessee, or the courts of the United States for the Middle District
of Tennessee, sitting in Nashville, Davidson County, Tennessee, but shall not
be restricted to such courts; (b) consents to the jurisdiction of each such
court in any such suit, action, or proceeding; and (c) waives any objection
which Guarantor may have to the laying of the venue of any such suit, action,
or proceeding in any of such courts.
VI. GUARANTY LIABILITY
1. Guarantor's obligations hereunder and under the other Loan
Documents shall be in an amount (such amount being referred to herein as the
"Maximum Guaranty Liability") equal to, but not in excess of, the maximum
liability permitted under Title 11 of the United States Code, any other state
or federal laws governing bankruptcy, suspension of payments, reorganization,
arrangement, adjustment of debts, dissolution, insolvency, relief of debtors or
creditors' rights and any other similar laws ("Applicable Bankruptcy Law"). To
the extent such obligations otherwise would be subject to avoidance under
Applicable Bankruptcy Law, if Guarantor is deemed not to have received valuable
consideration, fair value or reasonably equivalent value for its obligations
hereunder or under the other Loan Documents, Guarantor's obligations hereunder
and under the other Loan Documents shall be reduced to that amount which, after
giving effect thereto, would not render Guarantor insolvent, or leave Guarantor
with an unreasonably small capital to conduct its business, or cause Guarantor
to have incurred debts (or to be deemed to have intended to incur debts),
beyond its ability to pay such debts as they mature, at the time such
obligations are deemed to have been incurred under Applicable Bankruptcy Law.
As used herein, the terms "insolvent" and "unreasonably small capital" shall
likewise be determined in accordance with Applicable Bankruptcy Law. This
Paragraph 1 is intended solely to preserve the rights of the Bank hereunder and
under the other Loan Documents to the maximum extent permitted by Applicable
Bankruptcy Law, and neither the Guarantor nor any other person or entity shall
have any right or claim under this
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Paragraph 1 that otherwise would not be available under Applicable Bankruptcy
Law. Guarantor agrees that the Obligations at any time and from time to time
may exceed the Maximum Guaranty Liability of Guarantor, without impairing this
Guaranty or affecting the rights and remedies of the Bank hereunder.
VII. MISCELLANEOUS
1. In the event Bank is required at any time to refund or repay
to any person for any reason any sums collected by it on account of the
obligations subject to this Agreement, including but not limited to sums repaid
to a Trustee in Bankruptcy as a result of an avoided preferential transfer or
fraudulent conveyance, Guarantor agrees that all such sums shall be subject to
the terms of this Agreement and that Bank shall be entitled to recover such
sums from Guarantor notwithstanding the fact that this Agreement previously may
have been returned to Guarantor or that Guarantor previously may have been
discharged from further liability under this Agreement.
2. Any notice, demand, or request by Bank to Guarantor or by
Guarantor to Bank shall be in writing and shall be given in accordance with the
Loan Agreement.
3. This Agreement constitutes the entire agreement, and
supersedes all prior agreements and understandings, both written and oral,
between Guarantor and Bank with respect to the subject matter hereof. If any
clause, provision, or section of this Agreement is determined to be illegal or
invalid by any court, the invalidity of such clause, provision, or section
shall not affect any of the remaining clauses, provisions, or sections hereof
and this Agreement shall be construed and enforced as if such illegal or
invalid clause, provision, or section had not been contained herein. In case
any agreement or obligation contained in this Agreement be held to be in
violation of law, then such agreement or obligation shall be deemed to be the
agreement or obligation of Guarantor, as the case may be, to the full extent
permitted by law.
4. No set-off, claim, reduction, or diminution of any obligation
or defense of any kind or nature, which Guarantor or the Borrower has or may
have against Bank, shall be available hereunder to Guarantor against Bank.
5. No act of commission or omission of any kind or at any time
on the part of Bank in respect of any matter whatsoever shall in any way effect
or impair this Agreement. This Agreement is in addition to and no in
substitution for or discharge of any other suretyship held by Bank.
6. This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the laws of the State
of Tennessee. The invalidity or unenforceability of any one or more phrases,
sentences,
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clauses, or provisions in this Agreement shall not affect the validity or
enforceability of the remaining portions of this Agreement or any part thereof.
7. This Agreement shall bind Guarantor and Guarantor's
successors and assigns and the benefits hereof shall inure to its successors
and assigns. Bank may, without any notice whatsoever to Guarantor, sell,
assign, or transfer all or any part of the Obligations, and in that event each
and every immediate and successive assignee, transferee, or holder of all or
any part of the Obligations shall have the right to enforce this Agreement, by
suit or otherwise, for the benefit of such assignee, transferee, or holder, as
fully as though such assignee, transferee, or holder were herein by name given
such rights, powers, and benefits; provided, however, that Bank shall have an
unimpaired right, prior and superior to that of any assignee, transferee, or
holder, to enforce this Agreement for the benefit of Bank as to so much of the
Obligation that Bank has not sold, assigned, or transferred.
(Remainder of Page Intentionally Left Blank)
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WITNESS the due execution hereof as of the date first written above.
SYMBION AMBULATORY RESOURCE CENTRES, INC.
BY: /s/ Xxxxxxx X. Xxxx
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TITLE: President and Chief Executive Officer
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BY: /s/ Xxxxxx X. Xxxxx
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TITLE: CFO and Secretary
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