EXHIBIT 10.2
CONTINUING GUARANTY
THIS GUARANTY (this "Guaranty") is made and entered into as of the 29th day
of September, 2006 by Xxx XxXxxxxxx, Xxxx X. XxXxxxxx and Xxxxxx X. Xxxxxx (each
a "Guarantor", and together, the "Guarantors") in favor of I-Flow Corporation, a
Delaware corporation ("Seller").
RECITALS
A. WHEREAS, Seller and HAPC, Inc. a Delaware corporation (the "Buyer")
desire to enter into the Stock Purchase Agreement dated as of September 29, 2006
(the "SPA"; terms defined in the SPA and not otherwise defined herein are used
herein as therein defined ) among the Seller, Buyer, InfuSystem, Inc., a
California corporation and Iceland Acquisition Subsidiary, Inc, a California
corporation.
B. WHEREAS, it is a condition precedent to the Closing that the Guarantors
deliver this Guaranty.
NOW, THEREFORE, in consideration of the above Recitals, which are
incorporated into the Agreement below by reference as if fully set forth
therein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each Guarantor, Guarantors agree
with Seller as follows:
ARTICLE I
AGREEMENTS
SECTION 1.1 GUARANTY. Guarantors, jointly and severally, unconditionally
guarantee the full and prompt payment to Seller when due of the Termination Fee
(the "Guaranteed Obligations").
SECTION 1.2 CONTINUING GUARANTY. This Guaranty is given by the Guarantors
and each of them, without regard to any other guaranty by the other signers
hereof, or otherwise, and each Guarantor agrees that it shall continue in full
force and effect notwithstanding the death or release of, or the extension of
time to, any of the other Guarantors. This Guaranty shall be construed as a
continuing, absolute and unconditional guaranty of payment (and not merely of
collection) without regard to: (a) the legality, validity or enforceability of
the Guaranteed Obligations or any agreement, instrument or lien evidencing,
guaranteeing or securing the Guaranteed Obligations; (b) any defense (other than
payment), set-off or counterclaim that may at any time be available to the Buyer
or any other Guarantor against, and any right of setoff at any time held by, the
Seller; or (c) any other circumstance whatsoever (with or without notice to or
knowledge of Guarantors), whether or not similar to the foregoing, that
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Buyer or any other Guarantor, in bankruptcy or in any other
instance.
SECTION 1.3 OBLIGATIONS JOINT AND SEVERAL. The obligations of the
Guarantors hereunder are joint and several, and independent of the obligations
of the Buyer, and a separate
action or actions may be brought and prosecuted against any or all of the
Guarantors whether action is brought against the Buyer or any other Guarantor or
whether the Buyer or any other Guarantor be joined in any such action or
actions; and Guarantors waive the benefit of any statute of limitations
affecting their liability hereunder or the enforcement thereof.
SECTION 1.4 AUTHORIZATION. The Guarantors hereby authorize the Seller,
without notice to or further assent by the Guarantors, and without affecting the
Guarantors' liability hereunder (regardless of whether any subrogation or
similar right that the Guarantors may have or any other right or remedy of the
Guarantors is extinguished or impaired), from time to time to: (a) terminate,
release, compromise, subordinate, extend, accelerate or otherwise change the
amount or time, manner or place of payment of, or rescind any demand for payment
or acceleration of, the Guaranteed Obligations or any part thereof, or otherwise
amend the terms and conditions of the SPA, or any provision thereof (provided
that the amount of the Termination Fee or the terms under which it becomes
payable may not be amended without the prior written consent of the Guarantors);
(b) take and hold collateral from the Buyer or any other Person, perfect or
refrain from perfecting a lien on such collateral, and exchange, enforce,
subordinate, release (whether intentionally or unintentionally), or take or fail
to take any other action in respect of, any such collateral or lien or any part
thereof; (c) exercise in such manner and order as it elects in its sole
discretion, fail to exercise, waive, suspend, terminate or suffer expiration of,
any of the remedies or rights of the Seller against the Buyer or any other
obligor in respect of any Guaranteed Obligations or any collateral securing the
Guaranteed Obligations; (d) release, add or settle with any obligor (including
any Guarantor) in respect of this Guaranty; (e) accept partial payments on the
Guaranteed Obligations and apply any and all payments or recoveries from any
obligor (including any Guarantor) or collateral to such of the Guaranteed
Obligations as the Seller may elect in its sole discretion; and (f) refund at
any time, at the Seller's sole discretion, any payments or recoveries received
by the Seller in respect of any Guaranteed Obligations.
SECTION 1.5 CERTAIN WAIVERS. The Guarantors waive: (a) the right to require
the Seller to proceed against the Buyer or any other obligor, to proceed against
or exhaust any collateral or to pursue any other remedy in the Seller's power
whatsoever and the right to have the property of the Buyer or any other obligor
first applied to the discharge of the Guaranteed Obligations; (b) all rights and
benefits under applicable law purporting to reduce a guarantor's obligations in
proportion to the obligation of the principal or providing that the obligation
of a surety or guarantor must neither be larger nor in other respects more
burdensome than that of the principal; (c) the benefit of any statute of
limitations affecting the Guaranteed Obligations or the Guarantors' liability
hereunder; (d) any requirement of marshalling or any other principle of election
of remedies and all rights and defenses arising out of an election of remedies
by the Seller, even though that election of remedies, such as nonjudicial
foreclosure with respect to the security for a guaranteed obligation, has
destroyed the Guarantor's rights of subrogation and reimbursement against the
Buyer; (e) any right to assert against the Seller any defense (legal or
equitable), set-off, counterclaim and other right that the Guarantors may now or
at any time hereafter have against the Buyer or any other obligor; (f)
presentment, demand for payment or performance (including diligence in making
demands hereunder), notice of dishonor or nonperformance, protest, acceptance
and notice of acceptance of this Guaranty, and all other notices of any kind,
including (i) notice of the existence, creation or incurrence of new or
additional Guaranteed Obligations, (ii) notice of any action taken or omitted by
the Seller in reliance hereon, (iii) notice of any default by any obligor, (iv)
notice that any portion of the Guaranteed Obligations is due, (iv) notice of any
action against any obligor, or any enforcement of other action with respect to
any collateral, or the assertion of any right of the Seller hereunder; (g) any
rights, defenses and other benefits the Guarantors may have by reason of any
failure of the Seller to hold a commercially reasonable public or private
foreclosure sale or otherwise to comply with applicable law in connection with a
disposition of collateral; and (h) all defenses that at any time may be
available to the Guarantors by virtue of any valuation, stay, moratorium or
other law now or hereafter in effect and ALL RIGHTS AND DEFENSES THAT ARE OR MAY
BECOME AVAILABLE TO THE GUARANTOR BY REASON OF APPLICABLE LAW. For the avoidance
of doubt, nothing herein shall obligate the Guarantors to make any payment which
is illegal for the Guarantors to have made under any law, regulation or order
now or hereafter in effect in any jurisdiction applicable to the Guarantors.
Notwithstanding anything herein to the contrary, nothing herein shall restrict
the Guarantors' right to contest whether the termination fee is due under the
terms of the SPA.
SECTION 1.6 SUBROGATION; CERTAIN AGREEMENTS.
(a) THE GUARANTORS WAIVE ANY AND ALL RIGHTS OF SUBROGATION, INDEMNITY OR
REIMBURSEMENT, ANY AND ALL BENEFITS OF AND RIGHTS TO ENFORCE ANY POWER, RIGHT OR
REMEDY THAT THE SELLER MAY NOW OR HEREAFTER HAVE IN RESPECT OF THE GUARANTEED
OBLIGATIONS AGAINST THE BUYER OR ANY OTHER OBLIGOR, ANY AND ALL BENEFITS OF AND
RIGHTS TO PARTICIPATE IN ANY COLLATERAL, WHETHER REAL OR PERSONAL PROPERTY, NOW
OR HEREAFTER HELD BY THE SELLER, AND ANY AND ALL OTHER RIGHTS AND CLAIMS (AS
DEFINED IN THE BANKRUPTCY CODE) THE GUARANTORS MAY HAVE AGAINST THE BUYER OR ANY
OTHER OBLIGOR, UNDER APPLICABLE LAW OR OTHERWISE, AT LAW OR IN EQUITY, BY REASON
OF ANY PAYMENT HEREUNDER, UNLESS AND UNTIL THE GUARANTEED OBLIGATIONS SHALL HAVE
BEEN PAID IN FULL. Without limitation, the Guarantor shall exercise no voting
rights, shall file no claim, and shall not participate or appear in any
bankruptcy or insolvency case involving the Buyer with respect to the Guaranteed
Obligations unless and until all the Guaranteed Obligations shall have been paid
in full. If, notwithstanding the foregoing, any amount shall be paid to the
Guarantor on account of any such rights at any time, such amount shall be held
in trust for the benefit of the Seller and shall forthwith be paid to the Seller
to be held as collateral or credited and applied in accordance with the terms of
the SPA upon the Guaranteed Obligations, whether matured, unmatured, absolute or
contingent, in the discretion of the Seller.
(b) The Guarantors assume the responsibility for being and keeping
themselves informed of the financial condition of the Buyer and each other
obligor and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations that diligent inquiry would reveal, and agrees that
the Seller shall have no duty to advise the Guarantors of information regarding
such condition or any such circumstances.
SECTION 1.7 BANKRUPTCY NO DISCHARGE.
(a) This Guaranty shall not be discharged or otherwise affected by any
bankruptcy, reorganization or similar proceeding commenced by or against the
Buyer or any other obligor, including (i) any discharge of, or bar or stay
against collecting, all or any part of the Guaranteed Obligations in or as a
result of any such proceeding, whether or not assented to by the Seller, (ii)
any disallowance of all or any portion of the Seller's claim for repayment of
the Guaranteed Obligations and (iii) any amendment, modification, stay or cure
of the Seller's rights that may occur in any such proceeding. The Guarantors
understand and acknowledge that by virtue of this Guaranty, each Guarantor has
specifically assumed any and all risks of any such proceeding with respect to
the Buyer and each other obligor.
(b) Notwithstanding anything to the contrary herein contained, this
Guaranty (and any lien on any collateral securing this Guaranty or the
Guaranteed Obligations) shall continue to be effective or be reinstated, as the
case may be, if at any time any payment, or any part thereof, of any or all of
the Guaranteed Obligations is rescinded, invalidated, declared to be fraudulent
or preferential or otherwise required to be restored or returned by the Seller
in connection with any bankruptcy, reorganization or similar proceeding
involving the Buyer, any other obligor or otherwise, if the proceeds of any
collateral are required to be returned by the Seller under any such
circumstances, or if the Seller elects to return any such payment or proceeds or
any part thereof in its sole discretion, all as though such payment had not been
made or such proceeds had not been received. Without limiting the generality of
the foregoing, if prior to any such rescission, invalidation, declaration,
restoration or return, this Guaranty shall have been cancelled or surrendered
(or if any lien or collateral shall have been released or terminated in
connection with such cancellation or surrender), this Guaranty (and such lien
and collateral) shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, discharge or otherwise affect the
obligations of the Guarantors in respect of the amount of the affected payment
or application of proceeds (or such lien or collateral).
SECTION 1.8 SUBORDINATION. Effective if and at the time any Guaranteed
Obligations become due and payable hereunder, the Guarantors hereby absolutely
subordinate, both in right of payment and in time of payment, any and all
present or future obligations and liabilities of the Buyer and each other
obligor to the Guarantors ("Subordinated Debt"), to the prior payment in full in
cash of the Guaranteed Obligations, whether or not such Subordinated Debt
constitutes or arises out of any subrogation, reimbursement, contribution,
indemnity or similar right attributable to this Guaranty. If, whether or not at
the Seller's request, any Guarantor shall receive, after any Guaranteed
Obligations become due and payable hereunder and prior to payment in full in
cash of all Guaranteed Obligations, payment of any sum from the Buyer or any
other obligor upon any Subordinated Debt, any such sum shall be received by such
Guarantor as trustee for the Seller and shall forthwith be paid over to the
Seller on account of the Guaranteed Obligations, without reducing or affecting
in any manner the liability of such Guarantor under this Guaranty.
SECTION 1.9 EXPENSES. In addition to all sums payable hereunder, Guarantors
agree to pay all costs and expenses (including reasonable attorneys' fees)
incurred by Seller in connection with the enforcement of this Guaranty or any
other documents relating to the Guaranteed Obligations, whether or not a suit is
brought against Buyers or Guarantors.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each Guarantor hereby acknowledges and warrants that he has derived or
expects to derive a financial advantage from the transactions contemplated by
the SPA and this Guaranty.
ARTICLE III
MISCELLANEOUS
SECTION 3.1 GOVERNING LAW; FORUM; SERVICE OF PROCESS. This Guaranty shall
be governed by the internal laws of the State of New York, without regard to the
laws of any other jurisdiction that might be applied because of the conflicts of
law principles of the State of New York. Each Guarantor irrevocably agrees that
any legal action or proceeding arising out of or relating to this Guaranty may
be determined in any New York state or federal court sitting in New York County,
and each Guarantor hereby irrevocably submits to the non-exclusive jurisdiction
of the aforesaid courts for itself and with respect to its property. Each
Guarantor further agrees to accept service of process in any manner permitted by
such courts
SECTION 3.2 AMENDMENTS. No amendment of any provision of this Guaranty
(including a waiver thereof or consent relating thereto) shall be effective
unless the same shall be in writing and signed by the Seller and (except in the
case of an unconditional waiver or consent) each Guarantor. Any waiver or
consent relating to any provision of this Guaranty shall be effective only in
the specific instance and for the specific purpose for which given. No notice to
or demand on the Guarantors in any case shall entitle the Guarantors to any
other or further notice or demand in similar or other circumstances.
SECTION 3.3 SUCCESSORS AND ASSIGNS. This Guaranty and each amendment hereof
shall be binding upon and, subject to the next sentence, inure to the benefit of
the Guarantor, the Seller and their respective heirs, personal representatives,
executors, successors and assigns. The Guarantors shall not assign any of their
rights or obligations hereunder without the prior written consent of the Seller.
The benefit of this Guaranty shall automatically pass with any assignment of the
Guaranteed Obligations (or any portion thereof), to the extent of such
assignment.
SECTION 3.4 CUMULATIVE REMEDIES; FAILURE OR DELAY. The rights and remedies
provided for under this Guaranty are cumulative and are not exclusive of any
rights and remedies that may be available to the Seller under applicable law or
otherwise. No failure or delay on the part of the Seller in the exercise of any
power, right or remedy under this Guaranty shall impair such power, right or
remedy or shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude other or further exercise
of such or any other power, right or remedy.
SECTION 3.5 COUNTERPARTS. This Guaranty may be executed in counterparts,
each of which shall be deemed and original, but all of which shall constitute
one and the same instrument, and in making proof of this Guaranty it shall not
be necessary to produce or account for more than one such counterpart.
IN WITNESS WHEREOF, the undersigned Guarantors have executed this Guaranty
effective as of September 29, 2006
/s/ Xxx XxXxxxxxx
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Xxx XxXxxxxxx,
/s/ Xxxx X. XxXxxxxx
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Xxxx X. XxXxxxxx
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
