EXHIBIT 99.3
TRC GUARANTY
GUARANTY, dated as of October 11, 1996, made by TOTAL RENAL CARE, INC. (the
"Guarantor") to THE BANK OF NEW YORK, as Administrative Agent (in such
capacity, the "Administrative Agent") (i) for itself and for the ratable
benefit of the Lenders, the Swing Line Lender and the Letter of Credit Issuer
and (ii) for each Lender and any affiliate of a Lender which from time to time
shall have entered into an Interest Rate Protection Agreement with Total Renal
Care Holdings, Inc. (the "Borrower").
A. The Borrower is party to a Credit Agreement, dated as of October 11,
1996, by and among the Borrower, the lenders party thereto, BNY Capital
Markets, Inc. and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, as
Arrangers, DLJ Capital Funding, Inc., as Documentation Agent, and the
Administrative Agent (as the same may be amended, extended, increased,
modified, refunded or refinanced from time to time, the "Credit Agreement").
The Credit Agreement provides that the Guarantor shall execute and deliver
this Guaranty.
B. The Guarantor expects to derive substantial benefit from the Credit
Agreement and the making of the Loans and the issuance of the Letters of
Credit thereunder. The Guarantor acknowledges that the Administrative Agent,
the Documentation Agent, the Arrangers, the Swing Line Lender, the Letter of
Credit Issuer and the Lenders are relying on this Guaranty in entering into
and agreeing to make the Loans and issue the Letters of Credit and that the
Administrative Agent, the Documentation Agent, the Arrangers, the Swing Line
Lender, the Letter of Credit Issuer and the Lenders would not enter into the
Credit Agreement without the execution and delivery of this Guaranty.
C. The Guarantor wishes to guarantee the obligations of the Borrower under
the Loan Documents and each Interest Rate Protection Agreement entered into
with any Lender or any affiliate of a Lender.
In consideration of the premises and agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and in order to induce the Administrative Agent, the
Documentation Agent, the Arrangers, the Swing Line Lender, the Letter of
Credit Issuer and the Lenders to enter into the Credit Agreement and to make
and maintain the Loans and to induce BNY to issue the Letters of Credit, the
Guarantor covenants and agrees as follows:
1. Definitions
Except as otherwise provided herein, capitalized terms that are defined in
the Credit Agreement and are not defined herein shall have the meanings
assigned to such terms therein. For purposes hereof, the following terms shall
have the following meanings:
"Borrower Obligations": all obligations and liabilities, whether now
existing or hereafter arising, of the Borrower under the Loan Documents and
each Interest Rate Protection Agreement entered into with any Lender or any
affiliate of a Lender, whether direct, indirect or contingent, incurred as
primary obligor or otherwise, secured or unsecured, including all principal
and interest thereon (whether arising or accruing before or after the
occurrence of any Event of Default set forth in Section 9.1(h) or (i) of the
Credit Agreement and whether allowed as a claim), and all reasonable costs and
expenses of the Lender Parties in enforcing, preserving and protecting any
thereof, whether or not suit is instituted (as the same may be amended,
increased, modified, renewed, refinanced, refunded or extended from time to
time).
"Consideration": as of any date of determination, an amount equal to the
lesser of (a) the total "value" (within the meaning of Section 548 of the
Bankruptcy Code as in effect on the date hereof) given, directly or
indirectly, to the Guarantor during the period commencing on the date hereof
and ending on such date of determination, in exchange for its execution and
delivery of this Guaranty, and (b) the amount of "fair consideration" (within
the meaning of Article 10 of the New York Debtor Creditor Law as in effect on
the date hereof) given, directly or indirectly, to the Guarantor during the
period commencing on the date hereof and ending on such date of determination
in exchange for its execution and delivery of this Guaranty.
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"Guarantor Obligations": all of the obligations and liabilities of the
Guarantor hereunder, whether fixed, contingent, now existing or hereafter
arising, created, assumed, incurred or acquired.
"Lender Parties": the Administrative Agent, the Documentation Agent, the
Arrangers, the Letter of Credit Issuer and the Swing Line Lender.
"Lender Party": any of the Lender Parties.
"Net Worth": as of any date, the lesser of the following:
(a) (i) all of the Guarantor's "property, at a fair valuation" (within
the meaning of Section 101(32) of the Bankruptcy Code as in effect on the
date hereof) on such date, less (ii) the sum of the Guarantor's "debts"
(within the meaning of Section 101(12) of the Bankruptcy Code as in effect
on the date hereof) on such date (exclusive of such "debts" in respect of
this Guaranty), or
(b) (i) the "fair salable value of the assets" (within the meaning of
Article 10 of the New York Debtor Creditor Law as in effect on the date
hereof) of the Guarantor on such date, less (ii) "the amount that will be
required to pay the Guarantor's probable liability on its existing debts as
they become absolute and matured" (as such phrase would be construed under
Article 10 of the New York Debtor Creditor Law as in effect on the date
hereof) on such date (exclusive of such "debts" in respect of this
Guaranty).
2. Guaranty
(a) Subject to Section 2(b) hereof, the Guarantor hereby absolutely,
irrevocably and unconditionally guarantees the full and prompt payment when
due (whether at stated maturity, by acceleration or otherwise) of the Borrower
Obligations. This Guaranty constitutes a guaranty of payment, and no Lender
Party shall have any obligation to enforce any Loan Document or any Interest
Rate Protection Agreement or exercise any right or remedy with respect to any
collateral security thereunder by any action, including, without limitation,
making or perfecting any claim against any Person or any collateral security
for any of the Borrower Obligations prior to being entitled to the benefits of
this Guaranty. The Administrative Agent may, at its option, proceed against
the Guarantor in the first instance to enforce the Guarantor Obligations
without first proceeding against the Borrower or any other Person, and without
first resorting to any other rights or remedies, as the Administrative Agent
may deem advisable. In furtherance hereof, if any Lender Party is prevented by
law from collecting or otherwise hindered from collecting or otherwise
enforcing any Borrower Obligation in accordance with its terms, the
Administrative Agent, on behalf of such Lender Party, shall be entitled to
receive hereunder from the Guarantor after demand therefor, the sums which
would have been otherwise due had such collection or enforcement not been
prevented or hindered.
(b) Notwithstanding anything to the contrary contained in this Guaranty, the
maximum liability of the Guarantor hereunder shall not, as of any date of
determination, exceed the lesser of (i) the highest amount that is valid and
enforceable against the Guarantor under principles of New York State contract
law, and (ii) the sum of (1) all Consideration received by the Guarantor as of
such date of determination, plus (2) 95% of the Net Worth of the Guarantor on
such date of determination. In calculating the maximum liability of the
Guarantor hereunder, full effect shall be given to any provision in any other
Indebtedness of or guaranteed by the Guarantor which for purposes of
applicable fraudulent transfer or similar laws provides that indebtedness
incurred under the Credit Agreement or under this Guaranty shall be deemed to
have been incurred prior to such other Indebtedness.
(c) The Guarantor agrees that its Guarantor Obligations may at any time and
from time to time exceed the maximum liability of the Guarantor hereunder
without impairing this Guaranty or affecting the rights and remedies of any
Lender Party hereunder.
3. Absolute Obligation
Subject to Section 8, the Guarantor shall not be released from liability
hereunder unless and until the Revolving Credit Commitments and the Swing Line
Commitment have been terminated and either (a) the Borrower Obligations shall
have been indefeasibly paid in full, in cash, or (b) the Guarantor Obligations
shall
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have been paid in full, in cash. The Guarantor acknowledges and agrees that
(1) no Lender Party has made any representation or warranty to the Guarantor
with respect to the Borrower, its Subsidiaries, any Loan Document, any
Interest Rate Protection Agreement, or any agreement, instrument or document
executed or delivered in connection therewith or any other matter whatsoever,
and (2) the Guarantor shall be liable hereunder, and such liability shall not
be affected or impaired, irrespective of (A) the validity or enforceability of
any Loan Document, any Interest Rate Protection Agreement, or any agreement,
instrument or document executed or delivered in connection therewith, or the
collectability of any of the Borrower Obligations, (B) the preference or
priority ranking with respect to any of the Borrower Obligations, (C) the
existence, validity, enforceability or perfection of any security interest or
collateral security under any Loan Document, or any Interest Rate Protection
Agreement, or the release, exchange, substitution or loss or impairment of any
such security interest or collateral security, (D) any failure, delay, neglect
or omission by any Lender Party to realize upon any direct or indirect
collateral security, indebtedness, liability or obligation, any Loan Document,
any Interest Rate Protection Agreement, or any agreement, instrument or
document executed or delivered in connection therewith, or any of the Borrower
Obligations, (E) the existence or exercise of any right of set-off by any
Lender Party, (F) the existence, validity or enforceability of any other
guaranty with respect to any of the Borrower Obligations, the liability of any
other Person in respect of any of the Borrower Obligations, or the release of
any such Person or any other guarantor of any of the Borrower Obligations, (g)
any act or omission of any Lender Party in connection with the administration
of any Loan Document, any Interest Rate Protection Agreement, or any of the
Borrower Obligations, (h) the bankruptcy, insolvency, reorganization or
receivership of, or any other proceeding for the relief of debtors commenced
by or against, any Person, (i) the disaffirmance or rejection, or the
purported disaffirmance or purported rejection, of any of the Borrower
Obligations, any Loan Document, any Interest Rate Protection Agreement, or any
agreement, instrument or document executed or delivered in connection
therewith, in any bankruptcy, insolvency, reorganization or receivership, or
any other proceeding for the relief of debtors, relating to any Person, (j)
any law, regulation or decree now or hereafter in effect that might in any
manner affect any of the terms or provisions of any Loan Document, any
Interest Rate Protection Agreement, or any agreement, instrument or document
executed or delivered in connection therewith or any of the Borrower
Obligations, or which might cause or permit to be invoked any alteration in
the time, amount, manner or payment or performance of any of the Borrower's
obligations and liabilities (including, without limitation, the Borrower
Obligations), (k) the merger or consolidation of the Borrower into or with any
Person, (L) the sale by the Borrower of all or any part of its assets, (M) the
fact that at any time and from time to time none of the Borrower Obligations
may be outstanding or owing to any Lender Party, (N) any amendment or
modification of, or supplement to, any Loan Document or any Interest Rate
Protection Agreement or (O) any other reason or circumstance that might
otherwise constitute a defense available to or a discharge of the Borrower in
respect of its obligations or liabilities (including, without limitation, the
Borrower Obligations) or of the Guarantor in respect of any of the Guarantor
Obligations (other than by the performance in full thereof).
4. Representations and Warranties
The Guarantor hereby makes the following representations and warranties to
the Administrative Agent on behalf of each Lender Party:
(a) Existence and Power. The Guarantor is duly organized or formed and
validly existing in good standing under the laws of the jurisdiction of its
incorporation or formation, has all requisite power and authority to own
its Property and to carry on its business as now conducted, and is in good
standing and authorized to do business as a foreign corporation in each
jurisdiction in which the nature of the business conducted therein or the
Property owned therein makes such qualification necessary, except where
such failure to qualify could not reasonably be expected to have a Material
Adverse Effect.
(b) Authority. The Guarantor has full legal power and authority to enter
into, execute, deliver and perform the terms of the Loan Documents to which
it is a party and the transactions contemplated thereby and to incur the
obligations provided for therein, all of which have been duly authorized by
all proper and necessary corporate or other applicable action and are in
full compliance with its Certificate of Incorporation or By-Laws or its
other organization documents.
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(c) Binding Agreement. The Loan Documents to which the Guarantor is a
party constitute the valid and legally binding obligations of the
Guarantor, enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
affecting the enforcement of creditors' rights generally and except that
the remedy of specific performance is within the discretion of the
applicable court.
(d) Required Consents. No consent, authorization or approval of, filing
with, notice to, or exemption by, stockholders, any Governmental Authority
or any other Person is required to authorize, or is required in connection
with the execution, delivery and performance of the Loan Documents to which
the Guarantor is a party and the transactions contemplated thereby, or is
required as a condition to the validity or enforceability of such Loan
Documents.
(e) No Conflicting Agreements. The Guarantor is not in default under any
mortgage, indenture, contract or agreement to which it is a party, or by
which it or any of its Property is bound, the effect of which default could
reasonably be expected to have a Material Adverse Effect. The execution,
delivery or carrying out of the terms of the Loan Documents to which it is
a party and the transactions contemplated hereby and thereby, will not
constitute a default under, or result in the creation or imposition of, or
obligation to create, any Lien upon any Property of the Guarantor or result
in a breach of or require the mandatory repayment of or other acceleration
of payment under or pursuant to the terms of any such mortgage, indenture,
contract or agreement.
5. Events of Default
Each of the following shall constitute an "Event of Default" hereunder:
(a) The Guarantor shall fail to observe or perform any term, covenant or
agreement contained in Section 2 of this Guaranty; or
(b) The Guarantor shall fail to perform or observe any other term,
covenant or agreement on its part to be performed or observed pursuant to
this Guaranty and such failure shall have continued unremedied for a period
of 30 days after the Guarantor shall become aware of such failure; or
(c) Any representation or warranty of the Guarantor contained herein or
in any certificate, report or notice delivered or to be delivered by the
Guarantor pursuant hereto shall prove to have been incorrect or misleading
in any material respect when made; or
(d) This Guaranty shall cease to be in full force and effect or the
Guarantor shall so assert or shall disavow any of its obligations
hereunder; or
(e) The occurrence of an "Event of Default" under and as defined in the
Credit Agreement.
6. Notices
Except as otherwise specifically provided herein, all notices, requests,
consents, demands, waivers and other communications hereunder shall be given
in the manner provided in Section 11.2 of the Credit Agreement and, if to the
Administrative Agent, at its address set forth therein or, if to the
Guarantor, at the following address or to such other addresses as to which the
Administrative Agent may be hereafter notified by the Guarantor:
c/o Total Renal Care, Inc.
00000 Xxxxxxxxx Xxxx., Xxx. 000
Xxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxx
Vice President, Finance
Telephone: (000) 000-0000
Fax: (000) 000-0000
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7. Expenses
The Guarantor will upon demand pay to each of the Administrative Agent and
the Documentation Agent any and all reasonable sums, costs and expenses which
it may pay or incur pursuant to the provisions of this Guaranty or in
negotiating, executing or enforcing this Guaranty or in enforcing payment of
its Guarantor Obligations, including, but not limited to court costs,
reasonable collection charges, reasonable travel expenses, and reasonable
attorneys' fees and disbursements. All sums, costs and expenses which are due
and payable pursuant to this Section 7 shall bear interest, payable on demand,
at the highest rate then payable on the Borrower Obligations.
8. Repayment in Bankruptcy, etc.
If, at any time or times subsequent to the payment of all or any part of the
Borrower Obligations or the Guarantor Obligations, any Lender Party shall be
required to repay any amounts previously paid by or on behalf of the Borrower
or the Guarantor in reduction thereof by virtue of an order of any court
having jurisdiction in the premises, including, without limitation, as a
result of an adjudication that such amounts constituted preferential payments
or fraudulent conveyances, the Guarantor unconditionally agrees to pay to the
Administrative Agent (on behalf of such Lender Party) within 5 days after
demand a sum in cash equal to the amount of such repayment, together with
interest on such amount from the date of such repayment by such Lender Party
to the date of payment to the Administrative Agent at the applicable after-
maturity rate set forth in the Credit Agreement.
9. Other Provisions
(a) This Guaranty is the "TRC Guaranty" referred to in the Credit Agreement.
Each of the Administrative Agent and the Guarantor acknowledges that certain
provisions of the Credit Agreement, including, without limitation, Sections
11.1 (Amendments and Waivers), 11.3 (No Waiver; Cumulative Remedies), 11.4
(Survival of Representations and Warranties), 11.7 (Assignments and
Participations), 11.8 (Counterparts), 11.9 (Adjustments; Set-off), 11.12
(Governing Law), 11.13 (Headings Descriptive), 11.14 (Severability), 11.15
(Integration), 11.16 (Consent to Jurisdiction), 11.17 (Service of Process),
11.18 (No Limitation on Service or Suit) and 11.19 (WAIVER OF TRIAL BY JURY)
thereof, are made applicable to this Guaranty and all such provisions are
incorporated by reference herein as if fully set forth herein.
(b) No failure by the Administrative Agent to exercise, and no delay by the
Administrative Agent in exercising, any right or remedy hereunder shall
operate as a waiver thereof.
(c) Each and every right, remedy and power granted to the Administrative
Agent hereunder or allowed at law, in equity or by other agreement shall be
cumulative and not exclusive, and may be exercised by the Administrative Agent
from time to time.
(d) The Guarantor hereby waives presentment, demand for payment, notice of
default, nonperformance and dishonor, protest and notice of protest of or in
respect of this Guaranty, the Loan Documents and the Borrower Obligations,
notice of acceptance of this Guaranty and reliance hereupon by each Lender
Party, and the incurrence of any of the Borrower Obligations, notice of any
sale of collateral security or any default of any sort and notice of any
amendment, modification, increase or waiver of any Loan Document.
(e) The Guarantor is not relying upon any Lender Party to provide to the
Guarantor any information concerning the Borrower or any Subsidiary of the
Borrower, and the Guarantor has made arrangements satisfactory to the
Guarantor to obtain from the Borrower on a continuing basis such information
concerning the Borrower and its Subsidiaries as the Guarantor may desire.
(f) The Guarantor agrees that any statement of account with respect to the
Borrower Obligations from any Lender Party to the Borrower that binds the
Borrower shall also be binding upon the Guarantor, and that copies of said
statements of account maintained in the regular course of such Lender Party's
business may be used in evidence against the Guarantor in order to establish
its Guarantor Obligations.
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(g) The Guarantor acknowledges that it has received a copy of the Loan
Documents. In addition, the Guarantor acknowledges having read each Loan
Document and having had the advice of counsel in connection with all matters
concerning its execution and delivery of this Guaranty, and, accordingly,
waives any right it may have to have the provisions of this Guaranty strictly
construed against the Lender Parties.
(h) The Guarantor may not assign any right, or delegate any duty, it may
have under this Guaranty.
The Guarantor has caused this Guaranty to be duly executed and delivered by
its duly authorized officer as of the date first above written.
TOTAL RENAL CARE, INC.
/s/ Xxxx X. Xxxx
By: _________________________________
Name: Xxxx X. Xxxx
Title: VP Finance and CFO
Accepted and Agreed to:
THE BANK OF NEW YORK, as Administrative Agent
/s/ Xxxxxxx X. Xxxxxx
By: _________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Vice President
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