JOINT AND SEVERAL UNCONDITIONAL CONTINUING GUARANTY
THIS JOINT AND SEVERAL UNCONDITIONAL CONTINUING GUARANTY
("Guaranty") is executed as of May 7, 1997 by AMERICAN CONSOLIDATED
LABORATORIES, INC. ("ACL"), a Florida corporation; NOVAVISION, INC.
("NovaVision"), a North Carolina corporation; BIOPOLYMER CORPORATION
("Biopolymer"), a Delaware corporation; XXXXXXXXX OPHTHALMIC MANUFACTURING
CORPORATION ("SOMC"), a Florida corporation; S-O NEBRASKA, INC. ("S-O"), a
Florida corporation; WOLCON LABS, INC. ("Wolcon"), a Michigan corporation and
CAROLINA CONTACT LENS, INC. ("CCL"), a North Carolina corporation (collectively
"Guarantors") in favor of SIRROM INVESTMENTS, INC. ("Sirrom"), a Tennessee
corporation and XXXXXX- XXXXXXXXX CAPITAL FOCUS, L.P. ("TDCF"), a Delaware
limited partnership.
RECITALS:
WHEREAS, as set forth in that Intercreditor Agreement of this
date (as hereafter amended, modified or restated, the "Intercreditor Agreement")
among the parties hereto, Sirrom (as a Lender and as Agent) and TDCF (Sirrom as
a Lender (and, where relevant, as Agent) and TDCF are referred to herein
collectively as the "Lender Parties"), the Lender Parties have extended or
agreed to extend credit to ACL, and Sirrom has previously extended credit to
NovaVision, on certain terms and conditions (such credit is referred to herein
as the "Loans," which term shall have the same definition as it is assigned in
the Intercreditor Agreement); and
WHEREAS, the Guarantors are affiliated with one another and
are operationally and financially dependent upon one another such that the
extension of credit to any of them is a direct benefit to the others and
constitutes sufficient consideration and value to support the complete and
unconditional liability of each Guarantor for the entire indebtedness of ACL and
NovaVision to the Lender Parties (ACL and NovaVision are sometimes referred to
collectively as "Borrowers," and any reference herein to "Borrower" shall be
deemed a reference to ACL and NovaVision or either of them);
NOW, THEREFORE, as an inducement to cause the Lender Parties
to extend credit to Borrowers, and for other valuable consideration, the receipt
and sufficiency of which are acknowledged, it is agreed as follows:
1. Definition of Obligations. As used herein, the
"Obligations" shall mean (i) the Loans, (ii) all obligations under present and
future documents evidencing or further securing the Loans, (iii) all further
extensions of credit by the Lender Parties to Borrower made in compliance with
the requirements of the Intercreditor Agreement as to become subject thereto,
and (iv) all modifications, amendments, extensions, renewals and restatements of
the foregoing.
2. Guaranty of Payment. Except to the extent that ACL and
NovaVision are also Borrowers, in which cases their liability will be in their
capacity as Borrowers and not as
Guarantors hereunder, the Guarantors hereby jointly and severally guarantee to
the Lender Parties the timely payment and performance of the Obligations.
3. Guaranty Unconditional. Guarantors' guarantee of the
Obligations is absolute and unconditional. The validity of this Guaranty and
each Guarantor's absolute obligation to pay hereunder shall not be impaired by
any event whatsoever, including, but not limited to, the merger, consolidation,
dissolution, cessation of business or liquidation of Borrower; the financial
decline or bankruptcy of Borrower; the failure of any other party to guarantee
the Obligations or to provide collateral therefor; the Lender Parties'
compromise or settlement, with or without release, of any other party liable for
the Obligations; the Lender Parties' failure to perfect their security interest
in any collateral for the Obligations; the Lender Parties' release of any
collateral for the Obligations; the Lender Parties' failure to file suit against
Borrower (regardless of whether Borrower is becoming insolvent, is believed to
be about to leave the state or any other circumstance); the Lender Parties'
failure to give any Guarantor notice of default by Borrower; the
unenforceability of the Obligations against Borrower, due to bankruptcy
discharge, counterclaim or otherwise; the acceleration of the Obligations at any
time; the extension, increase, modification or renewal of the Obligations; the
Lender Parties' failure to exercise diligence in collection; the termination of
any relationship of any Guarantor with Borrower, including, but not limited to,
any relationship of ownership or commerce; Borrower's change of name or use of
any name other than the name used to identify Borrower in this Guaranty;
Borrower's use of the credit extended by the Lender Parties for any purpose
whatsoever; or any other event which might otherwise constitute a legal or
equitable discharge of, or defense available to, a guarantor or surety. Each
advance of credit by the Lender Parties to Borrower following the execution
hereof shall be deemed made in reliance upon the continued operation of this
Guaranty and shall constitute additional consideration for each Guarantor's
execution of this Guaranty. Each Guarantor agrees that this Guaranty shall be
valid and binding upon such Guarantor upon the delivery of this executed
Guaranty to Agent by any party whomsoever.
4. Guaranty Irrevocable. Each Guarantor's guarantee of the
Obligations is irrevocable, except that each Guarantor may at any time by
written notice to the Lender Parties prospectively terminate such Guarantor's
liability for any advances made by the Lender Parties subsequent to Lender's
receipt of the termination notice, except for any advance that the Lender
Parties had previously committed to make. After the delivery of such notice to
the Lender Parties, such Guarantor shall remain fully liable for: all principal,
interest and expenses outstanding as of the time of the Lender Parties' receipt
of the cancellation hereof; for all interest subsequently accruing thereon and
for all expenses subsequently incurred by the Lender Parties with respect
thereto; and for all subsequent principal advances that the Lender Parties may
have previously committed to make (regardless of whether the Lender Parties
waived any default or condition precedent in actually making any such advance),
together with all interest thereon and expenses related thereto.
5. Primary Liability of Guarantors. This Guaranty constitutes
a guarantee of payment and performance and not of collection. Accordingly, the
Lender Parties may enforce this Guaranty against Guarantors (or any of them)
without first making demand upon or
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instituting collection proceedings against Borrower. Each Guarantor's liability
for the Obligations is hereby declared to be primary, and not secondary, and any
Guarantor may be called upon hereunder to make any payment when due under the
Obligations irrespective of the acceleration of the Obligations.
6. Bankruptcy of Borrower. If proceedings are instituted by
Borrower under any state insolvency law or under any federal bankruptcy law, or
if such proceedings are instituted against Borrower, the Lender Parties may, at
their option, without notice, notwithstanding any limitation on the Lender
Parties' ability to use such proceedings as the basis of a default against
Borrower, declare all the Obligations presently due and payable by Guarantors.
7. No Marshaling of Assets. The Lender Parties may proceed
against any collateral securing the Obligations and against parties liable
therefor in such order as they may elect, and Guarantors shall not be entitled
to require the Lender Parties to marshal assets. The benefit of any rule of law
or equity to the contrary is hereby expressly waived.
8. Impairment of Collateral; Release of Liable Parties. The
Lender Parties may, in their sole discretion and with or without consideration,
release any collateral securing the Obligations or release any party liable
therefor. The defenses of impairment of collateral and impairment of recourse
and any requirement of diligence on the Lender Parties' part in collecting the
Obligations are hereby waived.
9. Deferral of Rights Against Borrower and Others. Each
Guarantor hereby irrevocably agrees that it shall not exercise (i) any right of
subrogation to the rights of the Lender Parties against Borrower, or (ii) any
and all other common law, statutory, contractual or other right of indemnity,
exoneration, contribution or other right of payment from any party whatsoever in
connection with the Obligations, until and unless the Obligations are first paid
in full. Guarantors acknowledge that their respective rights of contribution
have not otherwise been impaired by this Guaranty and that such rights are
properly taken into consideration in determining solvency and value for the
purpose of analysis under fraudulent conveyance laws and any other such laws.
10. References to Lender Parties. Rights granted to the Lender
Parties in this Guaranty are subject to the provisions of the Intercreditor
Agreement regarding the rights and duties of Agent to act on behalf of the
Lenders and the Required Lenders thereunder, as applicable, with respect to the
Obligations.
11. Amendment of Obligations. The Lender Parties may, without
notice to or the joinder of any Guarantor and without affecting any Guarantor's
liability hereunder, modify, extend, accelerate, reinstate, refinance, increase
or renew the Obligations (with or without the execution of new promissory notes)
and grant any consent or indulgence with respect thereto.
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12. Independent Obligations; No Setoff. Each Guarantor's
obligation under this Guaranty is independent of any other obligations among the
Lender Parties, Borrower and Guarantors. No setoff, counterclaim, reduction or
diminution of any obligation, or defense of any kind or nature that any
Guarantor or Borrower has or may have against the Lender Parties shall be
effective against the Lender Parties in the enforcement of this Guaranty.
13. Waivers of Notice. Guarantors hereby waive any requirement
of presentment, protest, notice of dishonor, notice of default, demand, and all
other actions or notices that may be required on the Lender Parties' part in
connection with the Obligations.
14. Guaranty Secured. This Guaranty is secured by all
collateral now or hereafter held by Lender Parties to secure obligations of each
Guarantor to the Lender Parties.
15. Application of Funds. The Lender Parties may apply amounts
received from any Guarantor for Borrower's account to the payment of the
Obligations is such order as the Agent may elect.
16. Subordination. Each Guarantor agrees that any existing or
future loan made by such Guarantor to Borrower and any other existing or future
obligation of Borrower to such Guarantor shall be subordinate to the Obligations
as to both payment and collection except as provided in this paragraph.
Accordingly, each Guarantor agrees not to accept any payment whatsoever from
Borrower (except for repayment of inter-company obligations, in the absence of a
default or an event of default under Borrowers' obligations to Lenders) or to
allow any payment by Borrower on such Guarantor's behalf until this Guaranty has
been terminated in full. Each Guarantor hereby grants to Agent for the account
of the Lender Parties a security interest in all accounts owed such Guarantor by
Borrower and in all instruments, chattel paper and other property now or
hereafter evidencing obligations of Borrower to such Guarantor, together with
all collateral therefor. Agent may file this Guaranty (or a copy hereof) as a
financing statement with respect thereto, or Agent may require any Guarantor to
execute a separate financing statement with respect thereto, or Agent may
require any Guarantor to take any other action necessary to perfect the Lender
Parties' security interest therein, at Guarantors' expense. Without limiting the
foregoing, all such property owned by any Guarantor in which a security interest
may be perfected by possession shall be delivered to the Lender Parties
immediately as made available to such Guarantor. Each Guarantor agrees that, in
the event of a bankruptcy or other insolvency proceeding involving Borrower,
such Guarantor will timely file a claim for the amount of the subordinated debt,
in form approved by Agent. Each Guarantor agrees to pursue said claim with
diligence and to comply with any instructions from Agent pertaining to the
pursuit of the claim. The proceeds of any such claim shall be delivered to Agent
for the account of the Lender Parties until the Obligations are paid in full.
17. Corporate Capacity. Each Guarantor warrants that it is and
shall remain a duly organized corporation in good standing under the laws of its
domicile, and that such Guarantor is and shall remain duly qualified to do
business in each state other than its domicile in which qualification is
necessary. Each Guarantor warrants that its execution and delivery of
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and performance under this Guaranty and all related documents are permitted
under and will not violate any provision of such Guarantor's Charter or By-Laws.
Each Guarantor further warrants that the execution of all necessary resolutions
and other prerequisites of corporate action have been duly performed so that the
individual executing this Guaranty and related documents on behalf of such
Guarantor is duly authorized to bind such Guarantor by his or her signature.
18. Cancellation by Agent. Agent may evidence its cancellation
of this Guaranty and the release of any Guarantor from liability hereunder by
delivering to such Guarantor an instrument of release, or by delivering this
Guaranty to such Guarantor, or both. Unless Agent issues a written statement
that this Guaranty has been "Canceled in Full As To All Obligations," however,
the purported cancellation hereof and release of such Guarantor shall not impair
such Guarantor's continuing liability for (i) surviving liability of Borrower to
reimburse the Lender Parties for expenses or to indemnify the Lender Parties
provided for in any document executed prior to the purported cancellation hereof
evidencing or securing the Obligations; and (ii) liability for avoided payments
and expenses related thereto (as provided in detail below).
19. Recovery of Avoided Payments. If any amount applied by the
Lender Parties to the Obligations is subsequently challenged by a bankruptcy
trustee, debtor-in-possession or other person or entity as an avoidable transfer
on the grounds that the payment constituted a preferential payment or a
fraudulent conveyance under state law or the Bankruptcy Code or any successor
statute thereto or on any other grounds, the Lender Parties may, at their option
and in their sole discretion, elect whether to contest such challenge. If the
Lender Parties contest the avoidance action, all costs of the proceeding,
including the fees and expenses of the Lender Parties' attorneys, will become
part of the Obligations. If the contested amount is nevertheless successfully
avoided, the avoided amount will also become part of the Obligations hereunder.
If the Lender Parties elect not to contest the avoidance action, the Lender
Parties may tender the amount subject to the avoidance action to the bankruptcy
court, trustee or debtor-in-possession and the amount so advanced shall become
part of the Obligations hereunder. Each Guarantor's obligation to reimburse the
Lender Parties for amounts due under this paragraph shall survive the purported
cancellation hereof except as otherwise provided above.
20. Assistance in Litigation. Each Guarantor covenants to,
upon request, cooperatively participate in any proceeding in which such
Guarantor is not an adverse party to the Lender Parties and which concerns the
Lender Parties' rights regarding the Obligations or any collateral now or
hereafter securing its payment.
21. Savings Provision. Should the liability of any Guarantor
hereunder for the entire amount of the Obligations be subject to avoidance or
limitation, notwithstanding the contrary agreement and intention of the parties
hereto, under any state or federal fraudulent conveyance law or other similar
law that may be determined to be applicable, then the liability of such
Guarantor shall be limited to the maximum amount for which such Guarantor may be
liable without legal impairment.
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22. Standard of Care; Limitation of Damages. The Lender
Parties shall be liable to Guarantors only for matters arising from this
Guaranty or otherwise related to the Obligations resulting from the Lender
Parties' gross negligence or willful misconduct, and liability for all other
matters is hereby waived. The Lender Parties shall not in any event be liable to
any Guarantor for special or consequential damages arising from this Guaranty or
otherwise related to the Obligations.
23. No Reliance on the Lender Parties' Analysis or
Information. Each Guarantor acknowledges and represents that, in connection with
such Guarantor's decision to enter into this Guaranty, such Guarantor has not
relied upon any financial projection, budget, assessment or other analysis by
the Lender Parties or upon any representation by the Lender Parties as to the
risks, benefits or prospects of Borrower's business activities or present or
future capital needs incidental thereto or the present or future provisions of
documents with Borrower that evidence the Obligations, all such considerations
having been examined fully and independently by each Guarantor. Each Guarantor
represents that it has made arrangements for the obtaining of information
regarding Borrower, and agrees that the Lender Parties are not obligated to
provide such Guarantor with any present or ongoing information about the
financial condition, operations or prospects of Borrower.
24. Recitals. Each Guarantor warrants and agrees that the
recitals set forth at the beginning of this Guaranty are true.
25. Consent to Jurisdiction and Venue. Each Guarantor hereby
irrevocably consents to the jurisdiction of the United States District Court for
the Middle District of Tennessee and of all Tennessee state courts sitting in
Davidson County, Tennessee, for the purpose of any litigation to which the
Lender Parties may be a party and which concerns this Guaranty or the
Obligations.
26. Not Partners; No Third Party Beneficiaries. Nothing
contained herein or in any related document shall be deemed to render any of the
Lender Parties a partner of Borrower or any Guarantor for any purpose. This
Guaranty and any documents securing the Obligations has been executed for the
sole benefit of the Lender Parties as an inducement to cause them to extend
credit to Borrower, and neither any Guarantor nor any other third party is
authorized to rely upon the Lender Parties' rights hereunder or to rely upon an
assumption that the Lender Parties has or will exercise their rights under any
document.
27. Costs of Collection Against Guarantors. Guarantors jointly
and severally agree to pay all costs of collection, including, without
limitation, court costs and reasonable attorney's fees that the Lender Parties
may incur in enforcing the terms of this Guaranty against any Guarantor.
28. Notices. Any communications concerning this Guaranty or
the credit described herein shall be given as provided in the Intercreditor
Agreement.
29. Indulgence Not Waiver. The Lender Parties' indulgence in
the existence
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of a default under the Obligations or any departure from the terms of this
Guaranty or any other document shall not prejudice the Lender Parties' rights to
make demand and recover from Guarantors in accordance with this Guaranty.
30. Cumulative Remedies. The remedies provided the Lender
Parties in this Guaranty are not exclusive of any other remedies that may be
available to the Lender Parties under any other document or at law or equity.
31. Amendment and Waiver in Writing. No provision of this
Guaranty can be amended or waived, except by a statement in writing signed by
the party against which enforcement of the amendment or waiver is sought. The
parties anticipate that additional subsidiaries of Borrower shall from time to
time become parties hereto by amendment, and no Guarantor shall be required to
consent to or join in any amendment adding an additional Guarantor hereunder.
32. Assignment. This guaranty shall be binding upon the heirs,
successors and assigns of Guarantors and Lender Parties, except that Guarantors
shall not assign any rights or delegate any obligations arising hereunder
without the prior written consent of the Lender Parties. Any attempted
assignment or delegation by any Guarantor without the required prior consent
shall be void.
33. Severability. Should any provision of this Guaranty be
invalid or unenforceable for any reason, the remaining provisions hereof shall
remain in full effect.
34. Applicable Law. The validity, construction and enforcement
of this Guaranty and all other documents executed with respect to the
Obligations shall be determined according to the laws of Tennessee, in which
state this Guaranty has been executed and delivered.
35. Gender and Number. Words used herein indicating gender or
number shall be read as the context may require.
36. Captions Not Controlling. Captions and headings have been
included in this Guaranty for the convenience of the parties, and shall not be
construed as affecting the content of the respective paragraphs.
37. Entire Agreement; No Oral Representations Limiting
Enforcement. This Guaranty represents the entire agreement between the parties
concerning the liability of Guarantors for the Obligations, and any oral
statements regarding Guarantor's liability for the Obligations are merged
herein. Without limiting the foregoing, Guarantors acknowledge the Lender
Parties' intention to enforce this Guaranty to the fullest extent possible and
Guarantors acknowledge that the Lender Parties have made no oral statements to
Guarantors that could be construed as a waiver of the Lender Parties' right to
enforce this Guaranty by all available legal means.
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38. Waiver of Jury Trial. EACH GUARANTOR HEREBY KNOWINGLY AND
VOLUNTARILY, WITH BENEFIT OF COUNSEL, WAIVES THE RIGHT TO HAVE ANY DISPUTE
ARISING FROM OR RELATED TO THIS GUARANTY OR THE OBLIGATIONS TRIED BY A JURY,
WITH THE RESULT THAT ANY SUCH DISPUTE WOULD BE TRIED BY A JUDGE RATHER THAN A
JURY. GUARANTOR ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO AGENT
AND LENDERS IN ENTERING INTO THE TRANSACTIONS DESCRIBED IN THE INTERCREDITOR
AGREEMENT AND CONFIRMS THAT NO REPRESENTATIVE OF AGENT OR LENDERS HAS MADE ANY
STATEMENT OR SUGGESTION THAT THIS PROVISION WILL NOT BE ENFORCED IN ACCORDANCE
WITH ITS TERMS.
39. Statute of Limitations. Each Guarantor hereby waives the
benefit of any statute of limitation applicable to such Guarantor's obligations
under this Guaranty, to the fullest extent permitted by law. Should a statute of
limitation nevertheless apply, then each Guarantor acknowledges and agrees that
the statute of limitation applicable to this Guaranty shall begin to run only
upon the Lender Parties' accrual of a cause of action against Guarantor
hereunder caused by such Guarantor's refusal to honor a demand for performance
hereunder made by the Lender Parties in writing; provided, however, if,
subsequent to the demand upon such Guarantor, the Lender Parties reache an
agreement with Borrower on any terms causing the Lender Parties to forbear in
the enforcement of its demand upon such Guarantor, the statute of limitation
shall be reinstated for its full duration until the Lender Parties subsequently
again make written demand upon such Guarantor.
40. No Burdensome Agreements. Each Guarantor warrants that it
is not a party to any contract or agreement and is not subject to any contingent
liability that does or may impair such Guarantor's ability to perform under the
terms of this Guaranty. Each Guarantor further warrants that the execution and
performance of this Guaranty will not cause a default, acceleration or other
event under any other contract or agreement to which such Guarantor or any
property of such Guarantor is subject, and will not result in the imposition of
any charge, penalty, lien or other encumbrance against any of such Guarantor's
property, except in favor of the Lender Parties.
41. Legal and Binding Agreement. Each Guarantor warrants that
the execution, delivery and performance of this Guaranty will not violate any
judicial or administrative order or governmental law or regulation, and that
this Guaranty is valid, binding and enforceable in every respect according to
its terms.
42. No Consent Required. Each Guarantor warrants that such
Guarantor's execution, delivery and performance of this Guaranty do not require
the consent of or the giving of notice to any third party including, but not
limited to, any other lender, governmental body or regulatory authority.
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43. Notice to Lender Upon Perceived Breach. Each Guarantor
agrees to give the Lender Parties prompt written notice of any action or
inaction by the Lender Parties in connection with the obligations that such
Guarantor believes may be actionable against the Lender Parties or a defense to
payment for any reason, including, but not limited to, commission of a tort or
violation of any contractual duty or duty implied by law.
Executed as of the date first written above.
THE UNDERSIGNED ACKNOWLEDGE A
THOROUGH UNDERSTANDING OF THE TERMS
OF THIS GUARANTY AND AGREE TO BE
BOUND THEREBY:
AMERICAN CONSOLIDATED LABORATORIES, INC.
By: /s/ Xxxxxx X. Arena
Title: CEO
NOVAVISION, INC.
By: /s/ Xxxx X. Xxxxxxxxx
Title: President
BIOPOLYMER CORPORATION
By: /s/ Xxxx X. Xxxxxxxxx
Title: President
XXXXXXXXX OPHTHALMIC MANUFACTURING
CORPORATION
By: /s/ Xxxxxx X. Arena
Title: Vice President
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CAROLINA CONTACT LENS, INC.
By: /s/ Xxxxxx X. Arena
Title: Vice President
S-O NEBRASKA, INC.
By: /s/ Xxxxxx X. Arena
Title: Vice President
WOLCON LABS, INC.
By: /s/ Xxxxxx X. Arena
Title: Vice President
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