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Exhibit 10.3
GUARANTY AGREEMENT
(Parent)
THIS GUARANTY AGREEMENT (this "Guaranty Agreement" or this
"Guaranty"), dated as of March __, 1998, is made by HEALTHPLAN SERVICES
CORPORATION ("HPS") and XXXXX ENTERPRISES, INCORPORATED ("Sykes") (each a
"Guarantor" and collectively the "Guarantors") to NATIONSBANK, NATIONAL
ASSOCIATION, a national banking association, as Agent (the "Agent") for each of
the lenders now or hereafter party to the Credit Agreement (as defined below)
(each a "Lender" and collectively the "Lenders").
W I T N E S S E T H:
WHEREAS, the Agent and Sykes HealthPlan Services, Inc (the "Borrower")
have entered into that certain Credit Agreement dated as of the date hereof (as
amended, supplemented or otherwise modified as of the date hereof, the "Credit
Agreement") and certain other Loan Documents, as defined in the Credit
Agreement; and
WHEREAS, HPS and Sykes each own fifty percent (50%) of the issued and
outstanding shares of common stock of the Borrower and will materially benefit
from the loans and advances made and to be made, and the letters of credit
issued and to be issued, under the Credit Agreement;
NOW, THEREFORE, in order to induce the Agent for the benefit of the
Lenders to enter into the Credit Agreement and to make and continue the loans
and advances thereunder, and to issue letters of credit for the account of the
Borrower, and in consideration of the mutual covenants and agreements contained
herein, each Guarantor agrees as follows:
. DEFINITIONS. All capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement.
. GUARANTY. Prior to the Guaranty Termination Date, as defined
below, each Guarantor hereby jointly and severally, unconditionally,
absolutely, continually and irrevocably guarantees to the Agent and the Lenders
the payment and performance in full of fifty percent (50%) of the Borrower's
Liabilities (as defined below). For all purposes of this Guaranty Agreement,
"Borrower's Liabilities" means: (a) the Borrower's prompt payment in full,
when due or declared due and at all such times, of all Obligations and all
other amounts pursuant to the terms of the Credit Agreement, the Notes, and all
other Loan Documents executed in connection with the Credit Agreement and all
Hedging Obligations heretofore, now or at any time or times hereafter owing,
arising, due or payable from the Borrower to any Lenders (or affiliate
thereof), including without limitation principal, interest, premium or fee
(including, but not limited to, loan fees and attorneys' fees and expenses);
and (b) the Borrower's prompt, full and faithful performance, observance and
discharge of each and every agreement, undertaking, covenant and provision to
be performed, observed or discharged by the Borrower under the Credit Agreement
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and all other Loan Documents executed in connection therewith and all Swap
Agreements. The Guarantors' obligations to the Agent and the Lenders under
this Guaranty Agreement are hereinafter collectively referred to as the
"Guarantors' Obligations". For all purposes of this Guaranty Agreement,
"Guaranty Termination Date" means the date at which the first to occur of
either (i) (a) the Borrower's Consolidated EBITDA, without giving effect, in
calculating Consolidated EBITDA, to the results of operations of any business
or Person acquired prior to the date of their Acquisition, for a twelve month
period is not less than $16,000,000 and (b) the Borrower shall have been in
compliance with Sections 8.1(a) through 8.1(d) of the Credit Agreement for four
(4) consecutive fiscal quarters, all as demonstrated to the satisfaction of the
Agent or (ii) the Borrower shall have received net proceeds of not less than
$75,000,000 from the sale of an initial public offering of its capital stock,
which proceeds shall be used to repay indebtedness outstanding under the Credit
Agreement.
Each Guarantor agrees that it is directly and primarily liable for
fifty percent (50%) of the Borrower's Liabilities.
. PAYMENT. If the Borrower shall default in payment or
performance of any Borrower's Liabilities, whether principal, interest,
premium, fee (including, but not limited to, loan fees and attorneys' fees and
expenses), or otherwise, when and as the same shall become due, whether
according to the terms of the Credit Agreement, by acceleration, or otherwise,
or upon the occurrence of any Default or Event of Default under the Credit
Agreement that has not been cured or waived, then any or all of the Guarantors
will, upon demand thereof by the Agent or its successors or assigns as of the
date of the Agent's demand, fully pay to the Agent, for the benefit of the
Lenders, subject to any restriction set forth in Section 2 hereof, an amount
equal to all Guarantors' Obligations then due and owing.
. UNCONDITIONAL OBLIGATIONS. This is a guaranty of payment and
not of collection. The Guarantors' Obligations under this Guaranty Agreement
shall be absolute and unconditional irrespective of the validity, legality or
enforceability of the Credit Agreement, the Notes or any other Loan Document or
any other guaranty of the Borrower's Liabilities, and shall not be affected by
any action taken under the Credit Agreement, the Notes or any other Loan
Document, any other guaranty of the Borrower's Liabilities, or any other
agreement between the Agent or the Lenders and the Borrower or any other
Person, in the exercise of any right or power therein conferred, or by any
failure or omission to enforce any right conferred thereby, or by any waiver of
any covenant or condition therein provided, or by any acceleration of the
maturity of any of the Borrower's Liabilities, or by the release or other
disposal of any security for any of the Borrower's Liabilities, or by the
dissolution of the Borrower or the combination or consolidation of the Borrower
into or with another entity or any transfer or disposition of any assets of the
Borrower or by any extension or renewal of the Credit Agreement, any of the
Notes or any other Loan Document, in whole or in part, or by any modification,
alteration, amendment or addition of or to the Credit Agreement, any of the
Notes or any other Loan Document, any other guaranty of the Borrower's
Liabilities, or any other agreement between the Agent or the Lenders and the
Borrower or any other Person, or by any other circumstance whatsoever (with or
without notice to or knowledge of any Guarantor) which may or
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might in any manner or to any extent vary the risks of such Guarantor, or might
otherwise constitute a legal or equitable discharge of a surety or a guarantor;
it being the purpose and intent of the parties hereto that, prior to the
Guaranty Termination Date, this Guaranty Agreement and the Guarantors'
Obligations hereunder shall be absolute and unconditional under any and all
circumstances and shall not be discharged except by payment as herein provided.
. CURRENCY AND FUNDS OF PAYMENT. Each Guarantor hereby
guarantees that the Guarantors' Obligations will be paid in lawful currency of
the United States of America and in immediately available funds, regardless of
any law, regulation or decree now or hereafter in effect that might in any
manner affect the Borrower's Liabilities, or the rights of the Agent or any
Lender with respect thereto as against the Borrower, or cause or permit to be
invoked any alteration in the time, amount or manner of payment by the Borrower
of any or all of the Borrower's Liabilities.
. EVENTS OF DEFAULT. In the event that (a) a Guarantor shall
file a petition to take advantage of any insolvency statute; (b) a Guarantor
shall commence or suffer to exist a proceeding for the appointment of a
receiver, trustee, liquidator or conservator of itself or of the whole or
substantially all of its property; (c) a Guarantor shall file a petition or
answer seeking reorganization or arrangement or similar relief under the
Federal bankruptcy laws or any other applicable law or statute of the United
States of America or any state or similar law of any other country; (d) a court
of competent jurisdiction shall enter an order, judgment or decree appointing a
custodian, receiver, trustee, liquidator or conservator of a Guarantor or of
the whole or substantially all of its properties, or approve a petition filed
against a Guarantor seeking reorganization or arrangement or similar relief
under the Federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state or similar law of any other country, or
if, under the provisions of any other law for the relief or aid of debtors, a
court of competent jurisdiction shall assume custody or control of a Guarantor
or of the whole or substantially all of its properties and such order,
judgment, decree, approval or assumption remains unstayed or undismissed for a
period of sixty (60) consecutive days; (e) there is commenced against a
Guarantor any proceeding or petition seeking reorganization, arrangement or
similar relief under the Federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state, which proceeding or
petition remains unstayed or undismissed for a period of sixty (60) consecutive
days; (f) there shall occur an Event of Default under the Credit Agreement; or
(g) any default shall occur in the payment of amounts due hereunder (each of
the foregoing an "Event of Default" hereunder); then notwithstanding any
collateral that the Lenders may possess from Borrower, such Guarantor, any
other Guarantor or any other guarantor of the Borrower's Liabilities, or any
other party, at the Agent's election and without notice thereof or demand
therefor, so long as such Event of Default shall be continuing, the Guarantors'
Obligations shall immediately become due and payable.
. SUITS. Each Guarantor from time to time shall pay to the
Agent for the benefit of the Lenders, on demand, at the Agent's place of
business set forth in the Credit Agreement, the Guarantors' Obligations as they
become or are declared due, and in the event such payment is not made
forthwith, the Agent or the Lenders or any of them may proceed to suit against
such Guarantor. At the Agent's election, one or more and successive or
concurrent suits may be brought
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hereon by the Agent against any Guarantor, whether or not suit has been
commenced against the Borrower, any other Guarantor or any other guarantor of
the Borrower's Liabilities, or any other Person and whether or not the Agent or
any Lender has taken or failed to take any other action to collect all or any
portion of the Borrower's Liabilities.
. SET-OFF AND WAIVER. Each Guarantor waives any right to assert
against the Agent and the Lenders as a defense, counterclaim, set-off or cross
claim, any defense (legal or equitable) or other claim which each Guarantor may
now or at any time hereafter have against the Borrower, the Agent or the
Lenders, without waiving any additional defenses, set-offs, counterclaims or
other claims otherwise available to such Guarantor. If at any time hereafter
the Agent or any Lender employs counsel for advice or other representation to
enforce the Guarantors' Obligations that arise out of an Event of Default,
then, in any of the foregoing events, all of the reasonable attorneys' fees
arising from such services and all expenses, costs and charges in any way or
respect arising in connection therewith or relating thereto shall be paid by
such Guarantor to the Agent, for the benefit of the Lenders, on demand.
. WAIVER; SUBROGATION.
(a) Each Guarantor hereby waives notice of the following events or
occurrences: (i) the Agent's acceptance of this Guaranty Agreement; (ii) the
Lenders' heretofore, now or from time to time hereafter loaning monies or
giving or extending credit to or for the benefit of the Borrower, whether
pursuant to the Credit Agreement or the Notes or any amendments, modifications,
or supplements thereto, or replacements or extensions thereof; (iii) the Agent,
the Lenders or the Borrower heretofore, now or at any time hereafter,
obtaining, amending, substituting for, releasing, waiving or modifying the
Credit Agreement, the Notes or any other Loan Documents; (iv) presentment,
demand, default, non-payment, partial payment and protest; (v) the Agent or the
Lenders heretofore, now or at any time hereafter granting to the Borrower (or
any other party liable to the Lenders on account of the Borrower's Liabilities)
any indulgence or extensions of time of payment of the Borrower's Liabilities;
and (vi) the Agent or the Lenders heretofore, now or at any time hereafter
accepting from the Borrower, any other Guarantor, any other guarantor of the
Borrower's Liabilities or any other Person, any partial payment or payments on
account of the Borrower's Liabilities or any collateral securing the payment
thereof or the Agent settling, subordinating, compromising, discharging or
releasing the same. Each Guarantor agrees that the Agent and each Lender may
heretofore, now or at any time hereafter do any or all of the foregoing in such
manner, upon such terms and at such times as the Agent and each Lender, in its
sole and absolute discretion, deems advisable, without in any way or respect
impairing, affecting, reducing or releasing such Guarantor from the Guarantors'
Obligations, and each Guarantor hereby consents to each and all of the
foregoing events or occurrences.
(b) Each Guarantor hereby agrees that payment or performance by
such Guarantor of the Guarantors' Obligations under this Guaranty Agreement may
be enforced by the Agent on behalf of the Lenders upon demand by the Agent to
such Guarantor without the Agent being required, such Guarantor expressly
waiving any right it may have to require the Agent, to (i) prosecute collection
or
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seek to enforce or resort to any remedies against the Borrower or any other
Guarantor or any other guarantor of the Borrower's Liabilities, IT BEING
EXPRESSLY UNDERSTOOD, ACKNOWLEDGED AND AGREED GUARANTY AGREEMENT TO BY SUCH
GUARANTOR THAT DEMAND UNDER THIS GUARANTY AGREEMENT MAY BE MADE BY THE AGENT,
AND THE PROVISIONS HEREOF ENFORCED BY THE AGENT, EFFECTIVE AS OF THE FIRST DATE
ANY EVENT OF DEFAULT OCCURS AND IS CONTINUING UNDER THE CREDIT AGREEMENT, or
(ii) seek to enforce or resort to any remedies with respect to any security
interests, Liens or encumbrances granted to the Agent by the Borrower, any
other Guarantor or any other Person on account of the Borrower's Liabilities or
any guaranty thereof. Neither the Agent nor any Lender shall have any
obligation to protect, secure or insure any of the foregoing security
interests, Liens or encumbrances on the properties or interests in properties
subject thereto. The Guarantors' Obligations shall in no way be impaired,
affected, reduced, or released by reason of the Agent's or any Lender's failure
or delay to do or take any of the acts, actions or things described in this
Guaranty including, without limiting the generality of the foregoing, those
acts, actions and things described in this Section 9.
(c) Each Guarantor further agrees with respect to this Guaranty
that such Guarantor shall have no right of subrogation, reimbursement or
indemnity, nor any right of recourse to security for the Borrower's Liabilities
until the Facility Termination Date.
. EFFECTIVENESS; ENFORCEABILITY. This Guaranty Agreement shall
be effective as of the date of the initial Advance under the Credit Agreement
and shall continue in full force and effect until the earlier of (i) the
Guaranty Termination Date or (ii) the Facility Termination Date. The Agent
shall give each Guarantor written notice of such termination in accordance with
Section 17 hereof. This Guaranty Agreement shall be binding upon and inure to
the benefit of each Guarantor, the Agent and the Lenders and their respective
successors and assigns. Notwithstanding the foregoing, no Guarantor may,
without the prior written consent of the Agent, assign any rights, powers,
duties or obligations hereunder. Any claim or claims that the Agent and the
Lenders may at any time hereafter have against a Guarantor under this Guaranty
Agreement may be asserted by the Agent or any Lender by written notice directed
to such Guarantor.
. REPRESENTATIONS AND WARRANTIES. Each Guarantor warrants and
represents to the Agent for the benefit of the Lenders that it is duly
authorized to execute, deliver and perform this Guaranty Agreement, that this
Guaranty Agreement is legal, valid, binding and enforceable against such
Guarantor in accordance with its terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles; and that such Guarantor's execution, delivery and performance of
this Guaranty Agreement do not violate or constitute a breach of its
certificate of incorporation or other documents of corporate governance or any
agreement to which such Guarantor is a party, or any applicable laws.
. EXPENSES. Each Guarantor agrees to be liable for the payment
of all reasonable fees and expenses, including without limitation, attorney's
fees and costs of collection, incurred by the Agent and each Lender in
connection with the enforcement of this Guaranty Agreement.
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. REINSTATEMENT. Each Guarantor agrees that this Guaranty
Agreement shall continue to be effective or be reinstated, as the case may be,
at any time payment received by the Agent under the Credit Agreement or this
Guaranty Agreement is rescinded or must be restored for any reason.
. COUNTERPARTS. This Guaranty Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
constitute one and the same instrument.
. RELIANCE. Each Guarantor represents and warrants to the
Agent, for the benefit of the Agent and the Lenders, that: (a) such Guarantor
has adequate means to obtain from Borrower, on a continuing basis, information
concerning Borrower and Borrower's financial condition and affairs and has full
and complete access to Borrower's books and records; (b) such Guarantor is not
relying on the Agent or any Lender, its or their employees, agents or other
representatives, to provide such information, now or in the future; (c) such
Guarantor is executing this Guaranty Agreement freely and deliberately, and
understands the obligations and financial risk undertaken by providing this
Guaranty; (d) such Guarantor has relied solely on the Guarantor's own
independent investigation, appraisal and analysis of Borrower and Borrower's
financial condition and affairs in deciding to provide this Guaranty and is
fully aware of the same; and (e) such Guarantor has not depended or relied on
the Agent or any Lender, its or their employees, agents or representatives, for
any information whatsoever concerning Borrower or Borrower's financial
condition and affairs or other matters material to such Guarantor's decision to
provide this Guaranty or for any counselling, guidance, or special
consideration or any promise therefor with respect to such decision. Each
Guarantor agrees that neither the Agent nor any Lender has any duty or
responsibility whatsoever, now or in the future, to provide to such Guarantor
any information concerning Borrower or Borrower's financial condition and
affairs, other than as expressly provided herein, and that, if such Guarantor
receives any such information from the Agent or any Lender, its or their
employees, agents or other representatives, such Guarantor will independently
verify the information and will not rely on the Agent or any Lender, its or
their employees, agents or other representatives, with respect to such
information.
. TERMINATION. This Guaranty Agreement and all obligations of
the Guarantors hereunder shall terminate without delivery of any instrument or
performance of any act by any party on the earlier of the Guaranty Termination
Date or the Facility Termination Date.
. NOTICE. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered to
such party (against receipt therefor) at the address set forth below or such
other address as such party shall specify to the other parties in writing (or,
in the case of telephonic notice or notice by telefacsimile (where the receipt
of such message is verified by return) expressly provided for hereunder, when
received at such telephone or telefacsimile number as may from time to time be
specified in written notice to the other parties hereto or otherwise received),
or if sent prepaid by certified or registered mail return receipt requested on
the third Business Day after the day on which mailed, or if sent prepaid by a
national
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overnight courier service, on the first Business Day after the day on which
delivered to such service against receipt therefor, addressed to such party at
said address:
(a) if to the Borrower or Sykes: if to HPS:
c/x Xxxxx HealthPlan Services, Inc. c/x Xxxxx HealthPlan Services, Inc.
0000 Xxxxxxxx Xxxx 0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000 Xxxxx, Xxxxxxx 00000
Attention: Mr. Xxxx Xxxxxx III Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000 Telefacsimile: (000) 000-0000
(b) if to the Agent: with a copy to:
NationsBank, N.A. NationsBank, National Association
Independence Center, 15th Floor 400 X. Xxxxxx Drive, 2nd Floor
NC1-001-15-04 Xxxxx, Xxxxxxx 00000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 Attention: Xxxxx X. Xxxxxx, Xx.,
Attention: Xxx Xxxxxxxxxx, Agency Services Senior Vice President
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000 Telefacsimile: (000) 000-0000
or to such other address as each party may designate for itself by like notice
given in accordance with this Section 17.
. GOVERNING LAW.
(A) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN THOSE SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE
THAT THEY SHALL BE GOVERNED BY THE LAWS OF ANOTHER
JURISDICTION) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA APPLICABLE
TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH
STATE.
(B) THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
AGREES AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY
STATE OR FEDERAL COURT SITTING IN THE COUNTY OF HILLSBOROUGH,
STATE OF FLORIDA, UNITED STATES OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER
EXPRESSLY WAIVES ANY OBJECTION
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THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN,
OR TO THE GUARANTY AGREEMEN EXERCISE OF JURISDICTION OVER
IT AND ITS PROPERTY BY, ANY SUCH COURT IN ANY SUCH SUIT, ACTION
OR PROCEEDING, AND THE BORROWER HEREBY IRREVOCABLY SUBMITS
GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH
COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(C) THE BORROWER AGREES THAT SERVICE OF PROCESS
MAY BE MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND
COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR
PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE
PREPAID) TO THE ADDRESS OF THE BORROWER PROVIDED IN SECTION
17, OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE
APPLICABLE LAWS IN EFFECT IN THE STATE OF FLORIDA.
(D) NOTHING CONTAINED IN SUBSECTIONS (A) OR (B)
HEREOF SHALL PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
ANY LOAN DOCUMENT IN THE COURTS OF ANY JURISDICTION WHERE THE
BORROWER OR ANY OF THE BORROWER'S PROPERTY OR ASSETS MAY BE
FOUND OR LOCATED. TO THE EXTENT PERMITTED BY THE APPLICABLE
LAWS OF ANY SUCH JURISDICTION, THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY
WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING,
OBJECTION TO THE EXERCISE OF JURISDICTION OVER IT AND ITS
PROPERTY BY ANY SUCH OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER MAY BE AVAILABLE UNDER APPLICABLE LAW.
(E) IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS OR REMEDIES UNDER OR RELATED TO ANY LOAN
DOCUMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION
THEREWITH, THE BORROWER, THE AGENT AND THE LENDERS HEREBY
AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY AND HEREBY IRREVOCABLY WAIVE, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PERSON MAY HAVE TO
TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties have duly executed this Guaranty
Agreement on the day and year first written above.
GUARANTORS:
HEALTHPLAN SERVICES CORPORATION
By:___________________________________________
Name: ________________________________________
Title: _______________________________________
XXXXX ENTERPRISES, INCORPORATED
By:___________________________________________
Name: ________________________________________
Title:________________________________________
AGENT:
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
By:___________________________________________
Name: Xxxxx X. Xxxxxx, Xx.
Title: Senior Vice President
GUARANTY AGREEMENT
