GUARANTY
September 16, 1999
Gateway Companies, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Ladies and Gentlemen:
We refer to that Convertible Loan Agreement (the "Loan Agreement"),
dated as of September 16, 1999, between Gateway Companies, Inc. ("Gateway") and
Vitech America, Inc., ("Vitech"), pursuant to which Gateway agreed to lend to
Vitech the principal amount of $31,000,000.00 for use in the repayment of
certain of Vitech's debts and accounts payable. Capitalized terms used and not
otherwise defined herein shall have the meanings set forth in the Loan
Agreement. Each of Xxxxxxx X. Xx. Xxxxxxx and Xxxxxxx X. Xx. Xxxxxxx, III
(individually, a "Guarantor" and, collectively, the "Guarantors") are
shareholders in Vitech and will benefit from the making of the Loan.
Accordingly, in order to induce Gateway to enter into the Loan Agreement and
make the Loan thereunder, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and Gateway agree as
follows:
1. Guarantee of Performance and Payment. The Guarantors, jointly and
severally as primary obligors and not as sureties only, hereby unconditionally
and irrevocably guarantee to Gateway, in an amount not to exceed $11,000,000,
the performance by Vitech of its obligations to Gateway arising out of or in
connection with the Loan Documents, including without limitation, the due and
punctual payment of an aggregate of $11,000,000 of any and all sums owed by
Vitech under the Loan Documents (collectively, the "Guaranteed Obligations").
This guaranty shall remain in effect so long as Vitech has any obligations under
the Loan Documents. The Guarantors' liabilities and obligations hereunder shall
not exceed the lesser of (i) $11,000,000 or (ii) the liabilities and obligations
of Vitech to Gateway arising out of or in connection with the Loan Documents,
except that the Guarantors shall also be liable for the costs and expenses set
forth in Section 7 hereof.
2. Guaranty Unconditional and Absolute. The obligations of the
Guarantors hereunder shall be joint, several, unconditional and absolute and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of Vitech or any other
guarantor of any of the Guaranteed Obligations;
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(ii) any modification or amendment of or supplement to the Loan
Agreement or the Note;
(iii) any change in the corporate existence (including its
constitution, laws, rules, regulations or powers), structure
or ownership of Vitech or the Guarantors, or any insolvency,
bankruptcy, reorganization or other similar proceeding
affecting Vitech or its assets, the Guarantors or any other
guarantor of any of the Guaranteed Obligations;
(iv) the existence of any claim, set-off or other rights which the
Guarantors may have at any time against Vitechor any other
corporation or person, whether in connection herewith or in
connection with any unrelated transaction;
(v) any invalidity or unenforceability relating to or against
Vitech or any other guarantor for any reason of the Loan
Agreement or any other guaranty agreement, or any provision of
applicable law or regulation purporting to prohibit payment by
Vitech of amounts to be paid by it under the Loan Agreement or
any of the Guaranteed Obligations or under any such guaranty
agreement; or
(vi) any other act or omission to act or delay of any kind by
Vitech, any other guarantor or any other corporation or person
or any other circumstance whatsoever which might, but for the
provisions of this paragraph, constitute a legal or equitable
discharge of the Guarantors' obligations hereunder.
3. Waiver by the Guarantors. The Guarantors irrevocably waive
acceptance hereof, diligence, presentment, demand, protest, notice of dishonor
and any notice not provided for herein, any requirement that at any time any
person exhaust any right or take any action against Vitech or its assets or any
other guarantor or person, and any other defense that may be available to a
surety and guarantor.
4. Subrogation. Upon making any payment hereunder, the Guarantors shall
be subrogated to the rights of Gateway against Vitech with respect to such
payment; provided that the Guarantors shall not enforce any right or receive any
payment by way of subrogation until all of the Guaranteed Obligations shall have
been discharged or paid in full.
5. Stay of Acceleration Ineffective with respect to Guarantors. In the
event that acceleration of the time for payment of any amount payable by Vitech
under the Loan Agreement is stayed upon the insolvency, bankruptcy, or
reorganization of Vitech, all such amounts otherwise subject to acceleration or
required to be paid upon any early termination pursuant to the terms of the Loan
Agreement shall nonetheless be payable by the Guarantors hereunder forthwith on
demand by Gateway.
6. Amendments and Waivers. No provision of this guaranty may be
amended, supplemented or modified, nor any of the terms and conditions hereof or
thereof waived, except by a written instrument executed by the Guarantors and
Gateway.
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7. Expenses and Taxes. Without limiting the generality of the
Guarantors' obligations hereunder, the Guarantors agree to pay to Gateway upon
its request all reasonable costs and expenses, including fees and disbursements
of counsel and taxes, incurred by Gateway in connection with any enforcement,
collection or other proceedings against any person or assets arising out of or
related to the Loan Documents, all of which shall be "Guaranteed Obligations"
the performance and payment of which is guaranteed hereunder. The Guarantors
agree that all amounts payable under this guaranty shall be paid without set-off
or counterclaim and free and clear of, and without deduction or withholding for
or on account of any present or future taxes, levies, imports, duties, fees,
assessments or other charges of whatever nature, now or hereafter imposed by any
governmental or taxing authority to which the Guarantors are subject.
8. Enforcement. Notwithstanding anything to the contrary in the Loan
Agreement, Guarantors and Vitech agree that any decision by Gateway to enforce
the terms hereof shall be in the sole discretion of Gateway, and Guarantors and
Vitech hereby waive any rights they may have to object to any such decision made
by Gateway.
9. Termination and Release. This guaranty shall be terminated and the
Guarantors shall be released from their obligations hereunder upon the earlier
of:
(i) the payment and performance in full by Vitech of each of the
Guaranteed Obligations in accordance with the terms of the
Loan Agreement and each other agreement, document, instrument
or other understanding pursuant to which such Guaranteed
Obligations arose, and the subsequent expiry of all applicable
bankruptcy preference periods, and
(ii) the execution and delivery of an instrument in writing from
Gateway terminating this guaranty and releasing Guarantors.
10. GOVERNING LAW; WAIVER OF JURY TRIAL. (a) THIS GUARANTY SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO ITS PRINCIPLES OF CONFLICT OF LAWS.
(b) THE GUARANTORS EACH HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM ESTABLISHED BY THIS GUARANTY OR ANY
OTHER LOAN DOCUMENT AND ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT ENTERED INTO
IN CONNECTION WITH THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11. Jurisdiction and Consent to Suit. (a) Any proceeding to enforce
this guaranty may be brought in any state or federal court of competent
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jurisdiction in the State of New York. Each Guarantor hereby irrevocably waives
any present or future objection to any such venue, and irrevocably consents and
submits unconditionally to the non-exclusive jurisdiction for itself and in
respect of any of its property of any such court. Each Guarantor further agrees
that final judgment against it in any such action or proceeding arising out of
or relating to this guaranty shall be conclusive and may be enforced in any
other jurisdiction within or outside the United States of America by suit on the
judgment, a certified or exemplified copy of which shall be conclusive evidence
of the fact and of the amount of its obligation.
(b) Prior to the Closing Date, each Guarantor shall
irrevocably designate and appoint an agent satisfactory to Gateway for service
of process in The City of New York, New York as its authorized agent to receive,
accept, and forward on its behalf service of process in any such proceeding, and
shall provide Gateway with evidence of the prepayment in full of the fees of
such agent. Each Guarantor agrees that service of process, writ, judgment, or
other notice of legal process upon said agent shall be deemed and held in every
respect to be effective personal service upon it. Each Guarantor shall maintain
such appointment (or that of a successor satisfactory to Gateway) continuously
in effect at all times
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while the Guarantor is obligated under this guaranty. Nothing herein shall
affect Gateway's right to serve process in any other manner permitted by
applicable law.
Very truly yours,
-----------------------------
Xxxxxxx X. Xx. Xxxxxxx
-----------------------------
Xxxxxxx X. Xx. Xxxxxxx, XXX
AGREED AND ACCEPTED:
GATEWAY COMPANIES, INC.
By:__________________________
Name:
Title:
AGREED AND ACCEPTED AS TO SECTION 8:
VITECH AMERICA, INC.
By:__________________________
Name:
Title:
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