EXHIBIT 10.12
GUARANTY
THIS GUARANTY, dated as of December 22, 1998, is made and given by LIFE
USA HOLDING, INC., a Minnesota corporation (the "Guarantor"), in favor of
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA, a Minnesota corporation (the
"Creditor").
RECITALS
A. LTCAmerica Holding, Inc., a Minnesota corporation (the "Debtor"),
will or may become, or is now, indebted (the "Norwest Debt") to Norwest Bank
Minnesota, National Association (the "Lender").
B. The Creditor has guarantied the Norwest Debt pursuant to a Guaranty
(By Organization) of even date herewith executed by the Creditor in favor of the
Lender (as the same may be amended, restated or otherwise modified, the
"Creditor Guaranty").
C. As a condition to providing the Creditor Guaranty, the Creditor has
required that this Guaranty be executed and delivered by the Guarantor and the
Guarantor is willing to do so.
D. Guarantor currently owns 100% of the issued and outstanding capital
stock of LifeUSA Insurance Company, a Minnesota corporation, which owns 100% of
the issued and outstanding capital stock of the Debtor, and finds it is in its
best interest to provide this Guaranty.
NOW, THEREFORE, For good and valuable consideration, the Guarantor
hereby covenants and agrees with the Creditor as follows:
Section 1. Defined Terms. As used in this Guaranty, the following terms
shall have the meaning indicated:
"Creditor" shall have the meaning indicated in the opening paragraph
hereof.
"Creditor Default" shall mean the occurrence and continuance of an
Event of Default under paragraph G. of Section 6.1 of the Norwest Agreement, if
and only if no other Event of
Default has occurred and is continuing under the Norwest Agreement.
"Debtor" shall have the meaning indicated in Recital A.
"Event of Default" shall have the meaning given to such term in the
Norwest Agreement.
"Guarantor" shall have the meaning indicated in the opening paragraph
hereof.
"Norwest Agreement" shall mean that certain Credit Agreement by and
between the Debtor and Lender dated as of December 22, 1998, as amended as
permitted under this Guaranty.
"Norwest Loan Documents" shall mean the Norwest Agreement and all other
instruments and agreements evidencing the Norwest Debt, as amended as permitted
under this Guaranty.
"Norwest Obligations" shall mean any indebtedness, liabilities and
obligations of the Debtor of every kind, nature or description under the Norwest
Loan Documents, in all cases whether due or to become due, and whether now
existing or hereafter arising or incurred.
"Obligations" shall mean any indebtedness, liabilities and obligations
of the Creditor of every kind, nature or description under the Creditor
Guaranty, in all cases whether due or to become due, and whether now existing or
hereafter arising or incurred.
"Person" shall mean any individual, corporation, partnership, joint
venture, firm, association, trust, unincorporated organization, government or
governmental agency or political subdivision or any other entity, whether acting
in an individual, fiduciary or other capacity.
Section 2. The Guaranty. The Guarantor hereby absolutely and
unconditionally guarantees and agrees to pay to the Creditor the amount of any
payment made by the Creditor with respect to the Obligations.
Section 3. Continuing Guaranty. This Guaranty is an unconditional and
continuing guaranty of payment and agreement to pay to the Creditor the amount
of any payment made by the
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Creditor of the Obligations, and the obligations of the Guarantor hereunder
shall not be released, in whole or in part, by any action or thing which might,
but for this provision of this Guaranty, be deemed a legal or equitable
discharge of a surety or guarantor, other than irrevocable payment to the
Creditor by the Guarantor in full of the Obligations. No notice of any renewal
or extension of the Obligations need be given to the Guarantor. The Guarantor
hereby expressly waives (a) demand of payment, presentment, protest, notice of
dishonor, nonpayment or nonperformance on any and all forms of the Obligations
or the Norwest Debt; (b) notice of acceptance of this Guaranty and notice of any
liability to which it may apply; (c) all other notices and demands of any kind
and description relating to the Obligations or the Norwest Debt now or hereafter
provided for by any agreement, statute, law, rule or regulation; and (d) any and
all defenses of the Creditor pertaining to the Obligations or of the Debtor with
respect to the Norwest Debt. The Guarantor shall be and remain liable for any
deficiency remaining after foreclosure of any mortgage, deed of trust or
security agreement securing all or any part of the Obligations. Notwithstanding
the terms of this Guaranty to the contrary, the Guarantor shall not be liable
under this Guaranty at any time when (A) either (I) a Creditor Default has
occurred and is continuing or (II) the Norwest Obligations have been assigned to
the Creditor, and (B) the Debtor is in compliance with the Norwest Obligations
which have been assigned or otherwise transferred from the Lender to the
Creditor by contract, subrogation or any other means, provided that, after such
assignment or transfer has occurred, at any time any Event of Default other than
a Creditor Default occurs and is continuing, the Guarantor shall thereafter be
liable under this Guaranty.
Section 4. Other Transactions. The Creditor is expressly authorized (a)
to exchange or release with or without consideration any or all collateral for
any of the Obligations and to deal with any such collateral in such manner as
the Creditor may elect without notice to the Guarantor; and (b) to amend,
modify, extend or supplement the Creditor Guaranty or other agreement or
instrument evidencing the Obligations or any part thereof, waive compliance by
the Lender or any other Person with the respective terms thereof and settle or
compromise any of the Obligations without notice to the Guarantor and without in
any manner affecting the absolute liabilities of the Guarantor
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hereunder. No invalidity or unenforceability of all or any part of the
Obligations or of any security therefor shall affect, impair or be a defense to
this Guaranty. The liabilities of the Guarantor hereunder shall not be affected
or impaired by any failure, delay, neglect or omission on the part of the
Creditor to realize upon any collateral or security for any or all of the
Obligations, nor by the taking by the Creditor of (or the failure to take) any
other guaranty or guaranties to secure the Obligations, nor by the taking by the
Creditor of (or the failure to take or the failure to perfect its security
interest in or other Lien on) collateral or security of any kind. The Guarantor
acknowledges that this Guaranty is in effect and binding without reference to
whether this Guaranty is signed by any other Person or Persons and that this
Guaranty shall continue in full force and effect, both as to the Obligations
then existing and/or thereafter created, notwithstanding the release of or
extension of time to any other guarantor of the Obligations.
Section 5. Actions Not Required. The Guarantor hereby waives any and
all right to cause the Creditor to proceed against any security for the
Obligations or any other recourse which the Creditor may have with respect
thereto and further waives any and all requirements that the Creditor institute
any action or proceeding at law or in equity, or obtain any judgment, against
the Debtor or any other Person, or with respect to any collateral security for
the Obligations, as a condition precedent to making demand on or bringing an
action or obtaining and/or enforcing a judgment against, the Guarantor upon this
Guaranty.
Section 6. No Subrogation. Notwithstanding any payment or payments made
by the Guarantor hereunder, the Guarantor waives all rights of subrogation to
any of the rights of the Creditor against the Debtor or any other Person liable
for payment of any of the Obligations or any collateral security or guaranty
held by the Creditor for the payment of the Obligations, and the Guarantor
waives all rights to seek any recourse to or contribution or reimbursement from
the Debtor or any other Person liable for payment of any of the Obligations in
respect of payments made by the Guarantor hereunder unless and until all of the
Obligations have been irrevocably paid in full.
Section 7. Application of Payments. Any and all payments upon the
Obligations made by the Guarantor or by any
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other Person, and/or the proceeds of any or all collateral or security for any
of the Obligations, may be applied by the Creditor on such items of the
Obligations as the Creditor may elect.
Section 8. Recovery of Payment. If any payment received by the Creditor
and applied to the Obligations is subsequently set aside, recovered, rescinded
or required to be returned for any reason (including, without limitation, the
bankruptcy, insolvency or reorganization of the Debtor or any other obligor),
the Obligations to which such payment was applied shall for the purposes of this
Guaranty be deemed to have continued in existence, notwithstanding such
application, and this Guaranty shall be enforceable as to such Obligations as
fully as if such application had never been made. References in this Guaranty to
amounts "irrevocably paid" or to "irrevocable payment" refer to payments that
cannot be set aside, recovered, rescinded or required to be returned for any
reason.
Section 9. Debtor's Financial Condition. The Guarantor is familiar with
the financial condition of the Debtor, and the Guarantor has executed and
delivered this Guaranty based on the Guarantor's own judgment and not in
reliance upon any statement or representation of the Creditor. The Creditor
shall have no obligation to provide the Guarantor with any advice whatsoever or
to inform the Guarantor at any time of the Creditor's actions, evaluations or
conclusions on the financial condition or any other matter concerning the Debtor
or the Lender.
Section 10. Remedies. All remedies afforded to the Creditor by reason
of this Guaranty are separate and cumulative remedies. Mere delay or failure to
act shall not preclude the exercise or enforcement of any rights and remedies
available to the Creditor.
Section 11. Bankruptcy of the Debtor. The Guarantor expressly agrees
that the obligations of the Guarantor under this Guaranty shall not in any way
be impaired or otherwise affected by the institution by or against the Debtor or
any other Person of any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or any other similar proceedings for relief under any
bankruptcy law or similar law for the relief of
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debtors and that any discharge of any of the Obligations pursuant to any such
bankruptcy or similar law or other law shall not diminish, discharge or
otherwise affect in any way the obligations of the Guarantor under this
Guaranty, and that upon the institution of any of the above actions, such
obligations shall be enforceable against the Guarantor.
Section 12. Costs and Expenses. The Guarantor will pay or reimburse the
Creditor on demand for all out-of-pocket expenses (including in each case all
reasonable fees and expenses of counsel) incurred by the Creditor in connection
with the enforcement of this Guaranty against the Guarantor.
Section 13. Waivers and Amendments. This Guaranty can be waived,
modified, amended, terminated or discharged only explicitly in a writing signed
by the Creditor. A waiver so signed shall be effective only in the specific
instance and for the specific purpose given.
Section 14. Notices. Any notice or other communication to any party in
connection with this Guaranty shall be in writing and shall be sent by manual
delivery, telefacsimile transmission, overnight courier or United States mail
(postage prepaid) addressed to such party at the address specified on the
signature page hereof, or at such other address as such party shall have
specified to the other party hereto in writing. All periods of notice shall be
measured from the date of delivery thereof if manually delivered, from the date
of sending thereof if sent by telefacsimile transmission, from the first
business day after the date of sending if sent by overnight courier, or from
four days after the date of mailing if mailed.
Section 15. Representations and Warranties. The Guarantor hereby
represents and warrants to the Creditor that:
(a) It is a Minnesota corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and has the power and authority and the legal right to own
and operate its properties and to conduct the business in which it is
currently engaged.
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(b) It has the power and authority and the legal right to
execute and deliver, and to perform its obligations under, this
Guaranty and has taken all necessary corporate action to authorize such
execution, delivery and performance.
(c) This Guaranty constitutes its legal, valid and binding
obligation enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
(d) The execution, delivery and performance of this Guaranty
will not (i) violate any provision of any law, statute, rule or
regulation or any order, writ, judgment, injunction, decree,
determination or award of any court, governmental agency or arbitrator
presently in effect having applicability to it, (ii) violate or
contravene any provision of its organizational documents, or (iii)
result in a breach of or constitute a default under any indenture, loan
or credit agreement or any other agreement, lease or instrument to
which it is a party or by which it or any of its properties may be
bound or result in the creation of any lien thereunder. It is not in
default under or in violation of any such law, statute, rule or
regulation, order, writ, judgment, injunction, decree, determination or
award or any such indenture, loan or credit agreement or other
agreement, lease or instrument in any case in which the consequences of
such default or violation could have a material adverse effect on its
business, operations, properties, assets or condition (financial or
otherwise).
(e) No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption
by, any governmental or public body or authority is required on its
part to authorize, or is required in connection with the execution,
delivery and performance of, or the legality, validity, binding effect
or enforceability of, this Guaranty.
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(f) There are no actions, suits or proceedings pending or, to
its knowledge, threatened against or affecting it or any of its
properties before any court or arbitrator, or any governmental
department, board, agency or other instrumentality which, if determined
adversely to it, would have a material adverse effect on its business,
operations, property or condition (financial or otherwise) or on its
ability to perform its obligations hereunder.
(g) It expects to derive benefits from the transactions
resulting in the creation of the Obligations and the Norwest Debt. The
Creditor may rely conclusively on the continuing warranty, hereby made,
that the Guarantor continues to be benefitted by the Creditor Guaranty
and the Norwest Debt, and the Creditor shall have no duty to inquire
into or confirm the receipt of any such benefits, and this Guaranty
shall be effective and enforceable by the Creditor without regard to
the receipt, nature or value of any such benefits.
Section 16. Continuing Guaranty. This Guaranty shall (a) remain in full
force and effect until irrevocable payment in full by the Guarantor of the
Obligations or the irrevocable payment in full of the Norwest Debt other than by
payment by the Creditor under the Creditor Guaranty, (b) be binding upon the
Guarantor, its successors and assigns and (c) inure to the benefit of, and be
enforceable by, the Creditor and its respective successors, transferees, and
assigns.
Section 17. Amendment to Norwest Loan Documents. The Guarantor will not
permit the Debtor to amend or otherwise modify, or waive any terms under the
Norwest Loan Documents without the prior written consent of the Creditor.
Section 18. Revocation. Notwithstanding any other provision hereof, the
Guarantor may revoke this Guaranty prospectively as to future transactions by
written notice to that effect actually received by the Creditor. No such
revocation shall release, impair or affect in any manner any liability hereunder
with respect to Obligations created, contracted, assumed or incurred prior to
receipt by the Creditor of written notice of revocation, or any renewals or
extensions thereof,
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theretofore or thereafter made, or all other costs, expenses and attorneys' fees
arising from such Obligations.
Section 19. Governing Law and Construction. THE VALIDITY, CONSTRUCTION
AND ENFORCEABILITY OF THIS GUARANTY SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
Section 20. Consent to Jurisdiction. AT THE OPTION OF THE CREDITOR,
THIS GUARANTY MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE COURT
SITTING IN HENNEPIN COUNTY, MINNESOTA; AND THE GUARANTOR CONSENTS TO THE
JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN
SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE GUARANTOR COMMENCES ANY ACTION
IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING
DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS GUARANTY, THE
CREDITOR AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF
THE JURISDICTIONS AND VENUES ABOVE- DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.
Section 21. Waiver of Jury Trial. EACH OF THE GUARANTOR AND THE
CREDITOR, BY ITS ACCEPTANCE OF THIS GUARANTY, IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 22. General. All representations and warranties contained in
this Guaranty or in any other agreement between the Guarantor and the Creditor
shall survive the execution, delivery and performance of this Guaranty and the
creation and payment of the Obligations. Captions in this Guaranty are for
reference and convenience only and shall not affect the interpretation or
meaning of any provision of this Guaranty.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the
date first above written.
GUARANTOR:
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GUARANTOR:
LIFE USA HOLDING, INC.
By /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Title CFO
----------------------------------
Attention: Xxxx X. Xxxxxxxx
000 Xxxxx Xxxxxxx 000, Xxxxx 00
Xxxxxxxxxxx, Xxxxxxxxx 00000
Telefacsimile No. 000-000-0000
Address for the Creditor:
Allianz Life Insurance Company of North America
Attention: Xxxxxx X. Xxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Telefacsimile Number: 000-000-0000
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