CONTINUING UNCONDITIONAL GUARANTY
WHEREAS, MEDICAL TECHNOLOGY SYSTEMS, INC. and MTS PACKAGING SYSTEMS, INC.
(collectively, the "Borrowers" and each a "Borrower") have entered into a Loan
and Security Agreement dated of even date herewith (as amended, restated or
otherwise modified from time to time, the "Loan Agreement") with LASALLE
BUSINESS CREDIT, INC., as Agent ("Agent"), STANDARD FEDERAL BANK, NATIONAL
ASSOCIATION, as Lender ("Lender") and the Guarantors named therein (the
"Guarantors") pursuant to which Agent and Lender have made or may from time to
time hereafter, make loans and advances to or extend other financial
accommodations to the Borrowers;
WHEREAS, the undersigned Guarantors are desirous of having Agent and Lender
extend and/or continue such loans and other extensions of credit to Borrowers,
and Agent has required that each Guarantor execute and deliver this Guaranty to
Agent as a condition to the extension and continuation of such credit; and
WHEREAS, the extension and/or continued extension of credit, as aforesaid,
is necessary and desirable to the conduct and operation of the business of
Borrowers and will inure to the financial benefit of each Guarantor;
NOW, THEREFORE, for value received and in consideration of any loan,
advance, or financial accommodation of any kind whatsoever heretofore, now or
hereafter made, given or granted to the Borrowers by Agent and/or Lender
(including, without limitation, the Loans, as defined in, and made or to be made
by Agent and/or Lender to the Borrowers pursuant to, the Loan Agreement), each
of the undersigned Guarantors unconditionally guaranties (i) the full and prompt
payment when due, whether at maturity or earlier, by reason of acceleration or
otherwise, and at all times thereafter, of all of the indebtedness, liabilities
and obligations of every kind and nature of the Borrowers to Agent and/or Lender
or any parent, affiliate or subsidiary of Agent and/or Lender (the terms "Agent"
and "Lender" as used hereafter shall include such parents, affiliates and
subsidiaries), howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, joint or several, now or hereafter existing,
or due or to become due, and howsoever owned, held or acquired by Agent and/or
Lender, whether through discount, overdraft, purchase, direct loan or as
collateral or otherwise, including without limitation all obligations and
liabilities of the Borrowers to Agent and/or Lender under the Loan Agreement and
(ii) the prompt, full and faithful discharge by Borrowers of each and every
term, condition, agreement, representation and warranty now or hereafter made by
each Borrower to Agent and/or Lender (all such indebtedness, liabilities and
obligations being hereinafter referred to as the "Borrowers' Liabilities"). Each
Guarantor further agrees to pay all costs and expenses, including, without
limitation, all court costs and reasonable attorneys' and paralegals' fees paid
or incurred by Agent and/or Lender in endeavoring to collect all or any part of
Borrowers' Liabilities from, or in prosecuting any action against, Guarantor or
any other guarantor of all or any part of Borrowers' Liabilities. All amounts
payable by the Guarantors under this Guaranty shall be payable upon demand by
Agent. This Guaranty and all documents executed by any Guarantor or Borrower in
connection with Borrowers' Liabilities shall be referred to collectively herein
as the "Loan Documents". All capitalized terms used herein and not defined shall
have the meanings assigned such terms in the Loan Agreement.
2
Notwithstanding any provision of this Guaranty to the contrary, it is
intended that this Guaranty, and any liens and security interests granted by
Guarantor to secure this Guaranty, not constitute a "Fraudulent Conveyance" (as
defined below). Consequently, each Guarantor agrees that if this Guaranty, or
any liens or security interests securing this Guaranty, would, but for the
application of this sentence, constitute a Fraudulent Conveyance with respect to
such Guarantor, this Guaranty with respect to such Guarantor and each such lien
and security interest granted by such Guarantor shall be valid and enforceable
only to the maximum extent that would not cause this Guaranty or such lien or
security interest to constitute a Fraudulent Conveyance with respect to such
Guarantor, and this Guaranty shall automatically be deemed to have been amended
accordingly at all relevant times. For purposes hereof, "Fraudulent Conveyance"
means a fraudulent conveyance under Section 548 of the "Bankruptcy Code" (as
hereinafter defined) or a fraudulent conveyance or fraudulent transfer under the
provisions of any applicable fraudulent conveyance or fraudulent transfer law or
similar law of any state, nation or other governmental unit, as in effect from
time to time.
Each Guarantor hereby agrees that, except as hereinafter provided, its
obligations under this Guaranty shall be unconditional, irrespective of (i) the
validity or enforceability of Borrowers' Liabilities or any part thereof, or of
any promissory note or other document evidencing all or any part of Borrowers'
Liabilities, (ii) the absence of any attempt to collect Borrowers' Liabilities
from either Borrower or any other Guarantor or other action to enforce the same,
(iii) the waiver or consent by Agent or Lender with respect to any provision of
any instrument evidencing Borrowers' Liabilities, or any part thereof, or any
other agreement heretofore, now or hereafter executed by either Borrower and
delivered to Agent or Lender, (iv) failure by Agent or Lender to take any steps
to perfect and maintain its security interest in, or to preserve its rights to,
any security or collateral for Borrowers' Liabilities, (v) the institution of
any proceeding under Chapter 11 of Title 11 of the United States Code (11 U.S.C.
ss.101 et seq.), as amended (the "Bankruptcy Code"), or any similar proceeding,
by or against either Borrower, or Agent's or Lender's election in any such
proceeding of the application of Section 1111(b)(2) of the Bankruptcy Code, (vi)
any borrowing or grant of a security interest by either Borrower as
debtor-in-possession, under Section 364 of the Bankruptcy Code, (vii) the
disallowance, under Section 502 of the Bankruptcy Code, of all or any portion of
Agent's or Lender's claim(s) for repayment of Borrowers' Liabilities, or (viii)
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of receivership or bankruptcy of
either Borrower, protest or notice with respect to Borrowers' Liabilities and
all demands whatsoever, and covenants that this Guaranty will not be discharged,
except by complete performance of the obligations and liabilities contained
3
herein. Upon the occurrence, and during the continuation of any Default or Event
of Default by either Borrower under any of the Loan Documents, Agent may, at its
sole election, proceed directly and at once, without notice (except as expressly
provided in the Loan Agreement or the Other Agreements), against each Guarantor
to collect and recover the full amount or any portion of Borrowers' Liabilities,
without first proceeding against either Borrower, or any other person, firm, or
corporation, or against any security or collateral for Borrowers' Liabilities.
Agent is hereby authorized, without notice or demand and without affecting
the liability of any Guarantor hereunder, to at any time and from time to time
(i) renew, extend, accelerate or otherwise change the time for payment of, or
other terms relating to, Borrowers' Liabilities or otherwise modify, amend or
change the terms of any promissory note or other agreement, document or
instrument now or hereafter executed by either Borrower and delivered to Agent
or Lender; (ii) accept partial payments on Borrowers' Liabilities; (iii) take
and hold security or collateral for the payment of Borrowers' Liabilities
guaranteed hereby, or for the payment of this Guaranty, or for the payment of
any other guaranties of Borrowers' Liabilities or other liabilities of either
Borrower, and exchange, enforce, waive and release any such security or
collateral; (iv) apply such security or collateral and direct the order or
manner of sale thereof as in its sole discretion it may determine; and (v)
settle, release, compromise, collect or otherwise liquidate Borrowers'
Liabilities and any security or collateral therefor in any manner, without
affecting or impairing the obligations of any Guarantor hereunder. Agent shall
have the exclusive right to determine the time and manner of application of any
payments or credits, whether received from either Borrower or any other source,
and such determination shall be binding on each Guarantor. All such payments and
credits may be applied, reversed and reapplied, in whole or in part, to any of
Borrowers' Liabilities as Agent shall determine in its sole discretion without
affecting the validity or enforceability of this Guaranty.
To secure the payment and performance of each Guarantors' obligations and
liabilities contained herein, each Guarantor grants to Agent, for its benefit
and/or the benefit of Lender a security interest in all property of each
Guarantor delivered concurrently herewith or which is now, or at any time
hereafter in transit to, or in the possession, custody or control of Agent or
Lender or any affiliate of Agent or Lender, and all proceeds of all such
property. Each Guarantor agrees that Agent shall have the rights and remedies of
a secured party under the Uniform Commercial Code of the Commonwealth of
Pennsylvania, as now existing or hereafter amended, with respect to all of the
aforesaid property, including without limitation thereof, the right to sell or
otherwise dispose of any or all of such property and apply the proceeds of such
sale to the payment of Borrowers' Liabilities. In addition, at any time after
maturity of Borrowers' Liabilities by reason of acceleration or otherwise, Agent
may, in its sole discretion, without notice to any Guarantor and regardless of
the acceptance of any security or collateral for the payment hereof, appropriate
and apply toward the payment of Borrowers' Liabilities (i) any indebtedness due
or to become due from Agent and/or Lender to any Guarantor, and (ii) any moneys,
credits or other property belonging to any Guarantor, at any time held by or
coming into the possession of Agent and/or Lender whether for deposit or
otherwise.
4
Each Guarantor hereby assumes responsibility for keeping itself informed of
the financial condition of each Borrower, and any and all endorsers and/or other
guarantors of any instrument or document evidencing all or any part of
Borrowers' Liabilities and of all other circumstances bearing upon the risk of
nonpayment of Borrowers' Liabilities or any part thereof that diligent inquiry
would reveal and each Guarantor hereby agrees that neither Agent nor Lender
shall have any duty to advise Guarantor of information known to Agent or Lender
regarding such condition or any such circumstances or to undertake any
investigation not a part of its regular business routine. If Agent or Lender, in
its sole discretion, undertakes at any time or from time to time to provide any
such information to any Guarantor, such party shall be under no obligation to
update any such information or to provide any such information to Guarantor on
any subsequent occasion.
Each Guarantor consents and agrees that Agent shall be under no obligation
to marshal any assets in favor of Guarantor or against or in payment of any or
all of Borrowers' Liabilities. Each Guarantor further agrees that, to the extent
that either Borrower makes a payment or payments to Agent, or Agent receives any
proceeds of collateral, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to such Borrower, its estate, trustee, receiver or
any other party, including, without limitation, Guarantor, under any bankruptcy
law, state or federal law, common law or equitable theory, then to the extent of
such payment or repayment, Borrowers' Liabilities or the part thereof which has
been paid, reduced or satisfied by such amount, and Guarantor's obligations
hereunder with respect to such portion of Borrowers' Liabilities, shall be
reinstated and continued in full force and effect as of the date such initial
payment, reduction or satisfaction occurred.
Each Guarantor agrees that any and all claims of Guarantor against either
Borrower, any endorser or any other guarantor of all or any part of Borrowers'
Liabilities, or against any of either Borrower's properties, whether arising by
reason of any payment by Guarantor to Agent pursuant to the provisions hereof,
or otherwise, shall be subordinate and subject in right of payment to the prior
payment, in full, of all of Borrowers' Liabilities.
Agent may, without notice to anyone, sell or assign Borrowers' Liabilities
or any part thereof, or grant participations therein, and in any such event each
and every immediate or remote assignee or holder of, or participant in, all or
any of Borrowers' Liabilities shall have the right to enforce this Guaranty, by
suit or otherwise for the benefit of such assignee, holder, or participant, as
fully as if herein by name specifically given such right, but Agent shall have
an unimpaired right, prior and superior to that of any such assignee, holder or
participant, to enforce this Guaranty for the benefit of Agent, as to any part
of Borrowers' Liabilities retained by Agent.
5
This Guaranty shall be binding upon each Guarantor and upon the successors
(including without limitation, any receiver, trustee or debtor in possession of
or for any Guarantor) of each Guarantor and shall inure to the benefit of Agent
and Lender and their successors and assigns. If there is more than one signatory
hereto, all references to Guarantor herein shall include each and every
Guarantor and each and every obligation of Guarantor hereunder shall be the
joint and several obligation of each Guarantor. Each Guarantor that is a
corporation or a partnership hereby represents and warrants that it has all
necessary corporate or partnership authority, as the case may be, to execute and
deliver this Guaranty and to perform its obligations hereunder.
This Guaranty shall continue in full force and effect, and Agent and/or
Lender shall be entitled to make loans and advances and extend financial
accommodations to either Borrower on the faith hereof until such time as Agent
has, in writing, notified each Guarantor that all of Borrowers' Liabilities have
been paid in full and discharged and the Loan Agreement has been terminated or
until Agent has actually received written notice from any Guarantor of the
discontinuance of this Guaranty as to that Guarantor, or written notice of the
dissolution of any Guarantor. In case of any discontinuance by, or dissolution
of, any Guarantor (collectively, a "Termination Event"), this Guaranty and the
obligations of such Guarantor and its successors or assigns shall remain in full
force and effect with respect to all of Borrowers' Liabilities incurred prior to
the receipt by Agent of written notice of the Termination Event. The occurrence
of a Termination Event with respect to one Guarantor shall not affect or impair
the obligations of any other Guarantor hereunder.
Wherever possible each provision of this Guaranty shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Guaranty shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining
provisions of this Guaranty.
THIS GUARANTY SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE
COMMONWEALTH OF PENNSYLVANIA.
Each Guarantor irrevocably agrees that, subject to Agent's sole and
absolute election, ALL ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR RESPECT,
ARISING OUT OF OR FROM OR RELATED TO THIS GUARANTY MAY BE LITIGATED IN COURTS
HAVING SITUS WITHIN THE CITY OF PHILADELPHIA, COMMONWEALTH OF PENNSYLVANIA. EACH
GUARANTOR HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR
FEDERAL COURTS LOCATED WITHIN SAID CITY AND STATE. Each Guarantor agrees that
all service of process may be made upon such Guarantor by mail or messenger
directed to such Guarantor at the address provided on the signature pages to the
Loan Agreement. EACH GUARANTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER
OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT AGAINST GUARANTOR BY LENDER IN
ACCORDANCE WITH THIS PARAGRAPH.
6
EACH GUARANTOR HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY TO THIS GUARANTY.
EACH GUARANTOR HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR THE
PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF PENNSYLVANIA OR IN ANY
OTHER JURISDICTION WHICH PERMITS THE ENTRY OF JUDGMENT BY CONFESSION, TO APPEAR
FOR GUARANTOR AT ANY TIME AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT UNDER THE LOAN AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS IN
ANY ACTION BROUGHT AGAINST SUCH GUARANTOR ON THIS GUARANTY AT THE SUIT OF AGENT
AND/OR LENDER WITH OR WITHOUT COMPLAINT OR DECLARATION FILED, WITHOUT STAY OF
EXECUTION, AS OF ANY TERM OR TIME, AND THEREIN TO CONFESS OR ENTER JUDGMENT
AGAINST SUCH GUARANTOR FOR THE ENTIRE UNPAID AMOUNT OF THE LIABILITIES AND ALL
ARREARAGES OF INTEREST THEREON, TOGETHER WITH ALL COSTS AND OTHER EXPENSES AND
AN ATTORNEY'S COLLECTION COMMISSION OF FIFTEEN PERCENT (15%) OF THE AGGREGATE
AMOUNT OF THE FOREGOING SUMS, BUT IN NO EVENT LESS THAN FIVE THOUSAND DOLLARS
($5,000.00); AND FOR SO DOING OR A COPY HEREOF VERIFIED BY AFFIDAVIT SHALL BE A
SUFFICIENT WARRANT.
THE AUTHORITY GRANTED HEREIN TO CONFESS JUDGMENT SHALL NOT BE EXTINGUISHED
BY ANY EXERCISE THEREOF, BUT SHALL CONTINUE FROM TIME TO TIME AND AT ALL TIMES
DURING THE DURATION OF THIS GUARANTY. EACH GUARANTOR ACKNOWLEDGES THAT GUARANTOR
HAS BEEN REPRESENTED BY COUNSEL IN CONNECTION WITH THE EXECUTION AND DELIVERY OF
THIS GUARANTY. EACH GUARANTOR KNOWINGLY WAIVES GUARANTOR'S RIGHT TO BE HEARD
PRIOR TO THE ENTRY OF SUCH JUDGMENT AND UNDERSTANDS THAT, UPON SUCH ENTRY, SUCH
JUDGMENT SHALL BECOME A LIEN ON CERTAIN PROPERTY OF GUARANTOR AND THAT EXECUTION
MAY IMMEDIATELY BE ISSUED ON THE JUDGMENT TO GARNISH, LEVY ON OR ATTACH CERTAIN
PERSONAL PROPERTY OF GUARANTOR.
EACH GUARANTOR WAIVES AND RELINQUISHES ALL ERRORS, DEFECTS AND
IMPERFECTIONS IN THE ENTRY OF JUDGMENT AS AFORESAID, OR IN ANY PROCEEDING
PURSUANT THERETO, AND ALL BENEFITS THAT MAY ACCRUE TO SUCH GUARANTOR BY VIRTUE
OF ANY LAW OR RULE OF COURT RELATING TO A STAY OF EXECUTION OR EXEMPTING ANY
PROPERTY FROM LEVY OR SALE UNDER EXECUTION.
Capitalized terms used herein and not otherwise defined shall have the
meanings given such terms in the Loan Agreement.
7
IN WITNESS WHEREOF, this Guaranty has been duly executed by the undersigned
as of this ____ day of _________, 2002.
MEDICATION MANAGEMENT TECHNOLOGIES, INC. CLEARWATER MEDICAL SERVICE, INC.
By: ___________________________ By: ___________________________
Name/Title: _____________________ Name/Title: _____________________
MEDICAL TECHNOLOGY LABORATORIES, INC. MEDICATION MANAGEMENT SYSTEMS, INC.
By: ___________________________ By: ___________________________
Name/Title: _____________________ Name/Title: _____________________
SYSTEMS PROFESSIONALS, INC. CART-XXXX, INC.
By: ___________________________ By: ___________________________
Name/Title: _____________________ Name/Title: _____________________
VANGARD PHARMACEUTICAL LIFESERV TECHNOLOGIES, INC.
PACKAGING, INC.
By: ___________________________ By: ___________________________
Name/Title: _____________________ Name/Title: _____________________
PERFORMANCE PHARMACY SYSTEMS, INC. MTS SALES & MARKETING, INC.
By: ___________________________ By: ___________________________
Name/Title: _____________________ Name/Title: _____________________
