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Exhibit 10.4
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (the "Guaranty") is dated as of the 24th day
of September, 1997, between THE PROVIDENT BANK, an Ohio banking corporation
("Provident"), and XXXXXX-XXXXXXX COMPANY, a Delaware corporation (the
"Guarantor").
PRELIMINARY STATEMENT
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Duramed Pharmaceuticals, Inc., a Delaware corporation (the "Borrower"),
has requested from Provident a loan in the sum of Eight Million Five Hundred
Thousand and 00/100 Dollars ($8,500,000.00) (the "Loan") for the purpose of
refinancing the Borrower's pharmaceutical facility located at 0000 Xxxxxx Xxxx,
Xxxxxxxxxx, Xxxx 00000 (the "Premises"). The Loan will be evidenced by a
Promissory Note in the amount of the Loan (the "Note") dated the date hereof,
and will be secured by an Open-End Mortgage (the "Mortgage") and an Assignment
of Leases, Rents and Proceeds (the "Assignment of Leases"). All obligations of
Borrower to Provident under the Note, the Mortgage and the Assignment of Leases
are hereinafter collectively referred to as the "Indebtedness."
NOW, THEREFORE, the parties hereto agree as follows:
1. To induce Provident to make the Loan, the Guarantor hereby
absolutely and unconditionally guarantees the Indebtedness, subject to the other
terms and conditions of this Guaranty. The Guarantor undertakes this guarantee
of the aforementioned payment and performance by Borrower notwithstanding that
any portion of the Indebtedness shall be void or voidable as between the
Borrower and any of its creditors including, any bankruptcy trustee of the
Borrower. The liability of the Guarantor shall be limited to a principal amount
of Eight Million Five Hundred Thousand and 00/100 Dollars ($8,500,000.00), plus
interest thereon as provided in the Note, and all costs of collection (including
reasonable attorneys' fees) and all expenses reimbursable pursuant to Paragraph
2 hereof.
2. This Guaranty is a guarantee of payment and not a guarantee of
collection. Notwithstanding the foregoing, upon Borrower's failure to pay any
portion of the Indebtedness promptly when due, prior to making any demand upon
Guarantor under this Guaranty, Provident shall first, by written notice, make
demand upon the Borrower, with a copy of such notice to Guarantor, to pay such
portion of the Indebtedness as is then due, unless provision of such a notice
shall be prohibited under Title 11 U.S. Code or successor statute, in which case
such notice shall be deemed to have been given as of the date of effectiveness
of the prohibition of such notice. Not less than thirty (30) days after such
notice shall have been given or deemed given, Provident, at its sole option, may
demand payment from the Guarantor of all or any part of the Indebtedness then
due and owing, or may proceed against the Guarantor (or an additional guarantor,
if there be any, or against any one or more of the foregoing) to collect the
Indebtedness, with or without proceeding against the Borrower, any co-maker or
co-surety or co-guarantor, any indorser or any collateral held as security for
the Indebtedness. The Guarantor agrees to reimburse Provident for all reasonable
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expenses of any nature whatsoever including, without limitation, reasonable
attorneys' fees, incurred or paid by Provident in exercising any right, power or
remedy against Guarantor conferred by this Guaranty. Any and all payments upon
the Indebtedness made by the Borrower, Guarantor or any other person, or from
the proceeds of any collateral held as security for the Indebtedness, may be
applied by Provident against the Indebtedness in whatever manner it may
determine in its sole discretion. Until the Indebtedness is paid in full,
Guarantor shall not exercise any right of subrogation with respect to payments
made by Guarantor pursuant to this Guaranty.
3. The liability of Guarantor and the rights of Provident under this
Guaranty shall not be impaired or affected in any manner by, and Guarantor
hereby consents in advance to and waives any requirement of notice for, any (a)
disposition, impairment, release, surrender, substitution, or modification of
any collateral securing the Indebtedness or the obligations created by this
Guaranty or any failure to perfect a security interest in any collateral; (b)
release (including adjudication or discharge in bankruptcy) or settlement with
any person primarily or secondarily liable for the Indebtedness (including,
without limitation, any maker, indorser, guarantor or surety); (c) delay in
enforcement of payment of the Indebtedness or delay in enforcement of this
Guaranty; (d) delay, omission, waiver, or forbearance in exercising any right or
power with respect to the Indebtedness or this Guaranty; (e) defense arising
from the enforceability or validity of the Indebtedness or any part thereof or
the genuineness, enforceability or validity of any agreement relating thereto;
(f) any defenses or counterclaims that the Borrower may assert on the
Indebtedness, including, but not limited to, failure of consideration, breach of
warranty, fraud, payment, statute of frauds, bankruptcy, infancy, statute of
limitations, lender liability, accord and satisfaction and usury; or (g) other
act or omission which might constitute a legal or equitable discharge of
Guarantor. Except such notices and demands as are expressly required hereby,
Guarantor waives presentment, protest, demand for payment, any right of set-off,
notice of dishonor or default, notice of acceptance of this Guaranty, notice of
the incurring of any of the Indebtedness and notice of any other kind in
connection with the Indebtedness or this Guaranty. Notwithstanding the
foregoing, during the time the Indebtedness remains outstanding, Provident will
not, without the prior written consent of Guarantor, which consent shall not be
unreasonably delayed or withheld, agree to any modification to any material term
or condition of the documents which evidence the Indebtedness.
4. The Guarantor agrees that in the event of (a) the dissolution or
insolvency of Borrower, (b) the inability of Borrower generally to pay its debts
as they become due, (c) an assignment by Borrower for the benefit of its
creditors, (d) the institution by Borrower of any action or proceeding with
respect to itself under Title 11 U.S. Code or successor statute, or (e) the
institution by another entity of any action or proceeding with respect to
Borrower under Title 11 U.S. Code or successor statute, and continuance of such
proceeding for sixty (60) days without dismissal, and whether or not such event
shall occur at a time when the Indebtedness is not then due and payable, the
Guarantor shall upon demand by Provident pay the Indebtedness to Provident as if
the Indebtedness was then due and payable.
5. In the event (a) any demand is made by Provident for payment by
Guarantor of any amount less than payment in full of the Indebtedness, or (b)
four (4) monthly payments of interest
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remain outstanding at any one time (or such lesser number of payments as
Provident shall agree in writing), then in any of said events, Guarantor shall
have the option to promptly tender to Provident the full amount owing under this
Guaranty.
6. Upon the payment by Guarantor of all amounts owing under this
Guaranty, Provident shall (a) endorse and deliver to Guarantor the Note, without
recourse and without any warranties whatsoever, except that Provident has good
title to the Note, and (b) execute non-recourse assignments of the Mortgage and
the Assignment of Leases, and Guarantor shall be subrogated to the rights of
Provident in respect of such Indebtedness.
7. Provident will exercise its reasonable efforts to provide to
Guarantor copies of the following documents in its possession during the term of
the Note: (a) default notices with respect to the Indebtedness sent by Provident
to Borrower, and (b) billing statements with respect to the Indebtedness sent by
Provident to Borrower; PROVIDED, that the failure by Provident to provide copies
of such documents will not (i) impair its rights under this Guaranty, or (ii)
constitute a defense available to Guarantor under this Guaranty, or (iii) give
rise to any damage claim against Provident or any other liability on Provident's
part to Guarantor.
8. The Guarantor agrees that this Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal, interest or any other amount with respect to the
Indebtedness is rescinded or must otherwise be restored by Provident upon the
bankruptcy or reorganization of Borrower, any other person or otherwise.
9. In order to secure the payment of the Indebtedness and the
obligations created by this Guaranty, the Guarantor hereby grants to Provident a
security interest in the accounts, securities, and properties in which the
Guarantor has any interest, and that are now, or are at any time hereafter, in
the possession of Provident. The Guarantor shall promptly provide to Provident
hereafter such financial information as it regularly distributes to its
shareholders and at approximately the same time as such information is
distributed to such shareholders.
10. Provident shall not be compelled to resort first to any collateral
for payment of any of the Indebtedness or the obligations created by this
Guaranty but may, at its election, require the obligation to be paid by the
Guarantor, with or without suit.
11. Guarantor agrees that with respect to any uncured event of default
under the Note, the Mortgage or the Assignment of Leases, Provident shall have
the sole option to declare or not to declare a default thereunder, or to waive
any such default from time to time, or to waive the right from time to time to
accelerate the Indebtedness after declaring a default, without in any way
affecting its right, after it does declare a default under the Note, the
Mortgage or the Assignment of Leases, to require payment from the Guarantor
under this Guaranty. After the declaration of any default by Provident under the
Note, the Mortgage or the Assignment of Leases, Provident shall have the sole
right to determine whether to apply payments received from the Borrower toward
obligations under the Indebtedness or any other obligations owing by Borrower to
Provident.
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12. This Guaranty shall inure to the benefit of and bind the parties
hereto, their successors and assigns, and their legal representatives or heirs.
Provident may, at its option, assign this Guaranty to any lending institution,
bank holding company, insurance company or the like, which becomes the indorsee
or assignee of any part of the Indebtedness, or who is in possession of or the
bearer of any part of the Indebtedness that is payable to the bearer, and the
Guarantor shall continue to be liable under this Guaranty to such other party to
the extent of such indorsed, assigned, or possessed Indebtedness.
13. This Guaranty and all the rights and obligations of the parties
thereto shall be governed by the laws of the State of Ohio.
14. As a specifically bargained inducement for Provident to extend
credit to Borrower (a) THE GUARANTOR HEREBY EXPRESSLY WAIVES THE RIGHT TO TRIAL
BY JURY IN ANY LAWSUIT OR PROCEEDING RELATED TO THIS GUARANTY OR ARISING IN ANY
WAY FROM THE INDEBTEDNESS OR TRANSACTIONS INVOLVING PROVIDENT AND THE BORROWER,
AND (b) THE GUARANTOR HEREBY DESIGNATES ALL COURTS OF RECORD SITTING IN
CINCINNATI, OHIO AND HAVING JURISDICTION OVER THE SUBJECT MATTER, STATE AND
FEDERAL, AS FORUMS WHERE ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING
FROM OR OUT OF THIS GUARANTY, ITS MAKING, VALIDITY OR PERFORMANCE, SHALL BE
PROSECUTED AS TO ALL PARTIES, THEIR PERMITTED SUCCESSORS AND ASSIGNS, AND BY THE
FOREGOING DESIGNATION, THE GUARANTOR CONSENTS TO THE JURISDICTION AND VENUE OF
SUCH COURTS.
15. The Guarantor warrants that it has the corporate power to execute
this Guaranty, that all the necessary corporate actions have been taken to
permit the Guarantor to give this Guaranty, and that the person executing this
Guaranty is duly empowered to do so on behalf of the Guarantor.
16. Provident warrants that it has the corporate power to execute this
Guaranty, that all the necessary corporate actions have been taken to permit
Provident to enter into this Guaranty, and that the person executing this
Guaranty is duly empowered to do so on behalf of Provident.
17. Provident warrants that (a) true and correct copies of the Note,
the Mortgage and the Assignment of Leases are attached hereto Exhibits A, B, and
C, respectively; (b) it has no ownership or security interest in any of the
equipment listed on Exhibit D attached hereto; and (c) the Loan constitutes all
loans held by Provident which are secured by the Mortgage and the Assignment of
Leases.
18. This Guaranty sets forth the complete agreement of the parties with
respect to the subject matter hereof and expressly supersedes the prior or
contemporaneous representation or agreement.
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19. No modification or amendment of this Guaranty shall be effective
unless in writing, signed by the party against whom enforcement is sought. No
waiver of any term or provision of this Guaranty shall be effective unless in
writing and only for the instance then given.
20. Any notice or consent required or permitted to be given under this
Guaranty shall be sufficient if made in writing and sent via courier, fax or
certified mail, postage prepaid, and shall be effective when received by the
party to whom sent.
If to Provident, to:
The Provident Bank
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Executive Vice President
FAX: (000) 000-0000
with a copy (which copy
shall not constitute
notice) to:
The Provident Bank
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxx
Senior Vice President and General Counsel
FAX: (000) 000-0000
If to Guarantor, to:
Xxxxxx-Xxxxxxx Company
000 Xxxxx Xxxx
Xxxxxx Xxxxxx, Xxx Xxxxxx 00000
Attention: Vice President, Pharmaceuticals Manufacturing
FAX: (000) 000-0000
with a copy to: Attention: President and CEO
FAX: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
Vice President and General Counsel
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute and deliver this Guaranty on and as of the
date first above set forth.
THE PROVIDENT BANK
By: /s/ Xxxxxxx X. Xxxxxxxx
______________________________________
Its: Vice President
_____________________________________
Date: September 24, 1997
____________________________________
XXXXXX-XXXXXXX COMPANY
By: /s/ Xxxxxxx X. Wild
______________________________________
Its: Xx. Xxxxxxx X. Wild,
Vice President and President
Pharmaceutical Sector
_____________________________________
Date:____________________________________
