EXHIBIT 10.5
UNCONDITIONAL CONTINUING GUARANTY
THIS UNCONDITIONAL CONTINUING GUARANTY ("GUARANTY") is made and entered
into as of September 29, 1997, for the benefit of DVI Financial Services Inc., a
Delaware corporation ("LENDER"), whose principal place of business is located at
000 Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, by U.S. Diagnostic Inc., a
Delaware corporation ("GUARANTOR"), whose principal place of business is located
at 000 Xxxxx Xxxxxxx Xxxxx, Xxxx Xxxx Xxxxx, Xxxxxxx 00000.
RECITALS
A. Guarantor owns all of the outstanding stock of Medical Diagnostics,
Inc., a Delaware corporation ("BORROWER").
B. Pursuant to the terms and subject to the conditions of that certain
Loan and Security Agreement dated as of the date hereof (the "LOAN AGREEMENT")
among Borrower, Guarantor and Lender, Lender has agreed to lend Borrower
$_________________ (the "LOAN").
Guarantor therefore guarantees and agrees as follows:
1. GUARANTY. In order to induce Lender, and in consideration thereof,
to enter into the Loan Agreement with Borrower, and any future agreements with
Borrower, Guarantor unconditionally, absolutely and irrevocably guarantees to
Lender the due and punctual payment, performance and discharge (whether upon
acceleration or otherwise in accordance with the terms thereof) any and all
present and future Obligations of Borrower to Lender, including, but not limited
to, the repayment to Lender of all sums presently due and owing and of all sums
that in the future become due and owing from Borrower under the Loan Agreement.
This guaranty of the Obligations includes in all cases, all such Obligations
that arise after the filing of a bankruptcy petition with respect to a Borrower
and all such Obligations that will become due but for the operation of (i) the
automatic stay under Section 362(a) of the Bankruptcy Code, (ii) Section 502(b)
of the Bankruptcy Code, or (iii) Section 506(b) of the Bankruptcy Code,
including, but not limited to, interest accruing under the Loan Documents after
the filing of a bankruptcy petition, whether or not allowed or allowable as a
claim in the bankruptcy proceeding. This Guaranty is a guaranty of prompt and
punctual payment of the Obligations, whether at stated maturity, by acceleration
or otherwise and is not merely a guaranty of collection.
2. DEFINITIONS AND TERMS.
(a) DEFINITIONS. For purposes of this Guaranty, the following
terms have the following definitions:
"BANKRUPTCY CODE" means the Bankruptcy Reform Act, Title 11 of
the United States Code, as amended from time to time, or any successor statute.
"BORROWER" includes the Borrower named in Recital A hereof and
any other Person at any time assuming or otherwise becoming primarily liable for
all or any part of the obligations of
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the named Borrower under the Loan Documents, including, but not limited to, the
trustee and the debtor-in-possession in any bankruptcy or similar proceeding
involving the named Borrower.
"EVENT OF DEFAULT" has the meaning specified in the Loan
Agreement.
"LIEN" has the meaning specified in the Loan Agreement.
"LOAN AGREEMENT" means the Loan and Security Agreement
described in Recital A hereto, and all extensions, addenda, supplements,
amendments, and modifications to the Loan Agreement.
"LOAN DOCUMENTS" has the meaning specified in the Loan
Agreement.
"PERSON" has the meaning specified in the Loan Agreement.
"OBLIGATIONS" of Borrower has the meaning specified in clauses
(i), (ii), (iii) and (iv) of the definition of Obligations contained in the Loan
Agreement as such apply to the Loan Agreement and any Other Loan Agreement
entered into by Guarantor as of the date hereof, unlimited by any limitation as
to the liability of Borrower contained therein.
"PROPERTY" means any interest of any Person in any kind of
property or asset, whether real, personal or mixed, or tangible or intangible.
"UCC" means the Uniform Commercial Code (or any successor
statute) of the State of California or of any other state the laws of which are
required by Section 9-103 thereof to be applied in connection with the issue of
perfection of security interests, as such statutes are in effect during the term
hereof.
(B) OTHER TERMS. All other undefined terms contained in this
Guaranty unless the context indicates otherwise have the meanings provided for
the UCC to the extent the same are used or defined therein. Wherever appropriate
in the context, terms used in herein in the singular also include the plural,
and VICE VERSA, and each masculine, feminine, or neuter pronoun shall also
include the other genders and references to the part shall include the whole.
The term "including" is not limiting and the term "or" has the inclusive meaning
represented by the term "and/or." The words "hereof," "herein," "hereunder," and
similar terms in this Guaranty refer to this Guaranty as a whole and not to any
particular provision of this Guaranty.
3. RIGHTS OF LENDER. Guarantor authorizes Lender, without giving notice
to Guarantor or obtaining Guarantor's consent and without affecting the
liability of Guarantor for the Obligations to the extent described in Section 1
hereof, from time to time to:
(a) compromise, settle, renew, extend the time for payment,
change the manner or terms of payment, discharge the performance of, decline to
enforce, or release all or any of the Obligations; grant other indulgences to
Borrower in respect thereof; or modify in any manner any documents (other than
this Guaranty) relating to the Obligations;
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(b) declare all Obligations due and payable upon the
occurrence of an Event of
Default;
(c) take and hold security for the performance of the
Obligations and exchange, enforce, waive and release any such security;
(d) apply and reapply such security and direct the order or
manner of sale thereof as Lender, in its sole discretion, may determine;
(e) release, surrender or exchange any deposits or other
Property securing the Obligations or on which Lender at any time may have a
Lien; release, substitute or add any one or more endorsers or guarantors of the
Obligations; or compromise, settle, renew, extend the time for payment,
discharge the performance of, decline to enforce, or release all or any
obligations of any such endorser or guarantor or other Person who is now or may
hereafter be liable on any Obligations or release, surrender or exchange any
deposits or other Property of any such Person;
(f) apply payments received by Lender from Borrower to any
Obligations, in such order as Lender determines, in its sole discretion, whether
or not any such Obligations are covered by this Guaranty; and
(g) assign this Guaranty in whole or in part.
4. GUARANTOR'S WAIVERS.
(a) Guarantor waives:
(1) any defense based upon any legal disability or
other defense of Borrower, or by reason of the cessation or limitation of the
liability of Borrower from any cause (other than full payment of all
Obligations), including, but not limited to, failure of consideration, breach of
warranty, statute of frauds, statute of limitations, accord and satisfaction,
and usury;
(2) any defense based upon any legal disability or
other defense of any other guarantor or other Person;
(3) any defense based upon any lack of authority of the
officers, directors, partners or agents acting or purporting to act on behalf of
Borrower or any principal of Borrower or any defect in the formation of Borrower
or any principal of Borrower;
(4) any defense based upon the application by Borrower
of the proceeds of the Loan for purposes other than the purposes represented by
Borrower to Lender or intended or understood by Lender or Guarantor;
(5) any defense based on Guarantor's rights, under
statute or otherwise, to require Lender to xxx Borrower or otherwise to exhaust
its rights and remedies against Borrower or any other Person or against any
collateral before seeking to enforce this Guaranty;
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(6) any defense based on Lender's failure at any time
to require strict performance by Borrower of any provision of the Loan Documents
or by Guarantor of this Guaranty. No such failure waives, alters or diminishes
any right of Lender thereafter to demand strict compliance and performance
therewith. Nothing contained herein prevents Lender from foreclosing on the Lien
of any deed of trust, mortgage or other security agreement, or exercising any
rights available to Lender thereunder, and the exercise of any such rights does
not constitute a legal or equitable discharge of Guarantor;
(7) any defense arising from any act or omission of
Lender which changes the scope of Guarantor's risks hereunder;
(8) any defense based upon Lender's election of any
remedy against Guarantor or Borrower or both; or any defense based on the order
in which Lender enforces its remedies;
(9) any defense based on (A) Lender's surrender,
release, exchange, substitution, dealing with or taking any additional
collateral, (B) Lender's abstaining from taking advantage of or realizing upon
any Lien or other guaranty, and (C) any impairment of collateral securing the
Obligations, including, but not limited to, Lender's failure to perfect, or
maintain the perfection or priority of, a Lien in such collateral;
(10) any defense based upon Lender's failure to
disclose to Guarantor any information concerning Borrower's financial condition
or any other circumstances bearing on Borrower's ability to pay the Obligations;
(11) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger in amount
nor in any other respects more burdensome than that of a principal;
(12) any defense based upon Lender's election, in any
proceeding instituted under the Bankruptcy Code, of the application of Section
1111(b)(2) of the Bankruptcy Code or any successor statute;
(13) any defense based upon any borrowing or any grant
of a Lien under Section 364 of the Bankruptcy Code;
(14) any defense based on Lender's failure to be
diligent or to act in a commercially reasonable manner, or to satisfy any other
standard imposed on a secured party, in exercising rights with respect to
collateral securing the Obligations;
(15) notice of acceptance hereof; notice of the
existence, creation or acquisition of any Obligation; notice of any Event of
Default; notice of the amount of the Obligations outstanding from time to time;
notice of any other fact which might increase Guarantor's risk; diligence;
presentment; demand of payment; protest; filing of claims with a court in the
event of Borrower's receivership or bankruptcy and all other notices and demands
to which
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Guarantor might otherwise be entitled (and the same do not have to be made on
Borrower as a condition precedent to Guarantor's obligations hereunder);
(16) any defense based on errors and omissions by
Lender in connection with the administration of the Loan;
(17) any defense based on application of fraudulent
conveyance or transfer law or shareholder distribution law to any of the
Obligations or the security therefor;
(18) any defense based on Lender's failure to seek
relief from stay or adequate protection in Borrower's bankruptcy proceeding or
any other act or omission by Lender which impairs Guarantor's prospective
subrogation rights;
(19) any defense based on legal prohibition of Lender's
acceleration of the maturity of the Obligations during the occurrence of an
Event of Default or any other legal prohibition on enforcement of any other
right or remedy of Lender with respect to the Obligations and the security
therefor; and
(20) the benefit of any statute of limitations
affecting the liability of Guarantor hereunder or the enforcement hereof.
(b) The payment of all sums payable under the Loan Documents
or any part thereof or other act which tolls any statute of limitations
applicable to the Loan Documents similarly operate to toll the statute of
limitations applicable to Guarantor's liability hereunder.
5. SUBROGATION. Guarantor may not exercise any right which it may
acquire by reason of any payment made hereunder, whether by way of subrogation,
reimbursement or otherwise, until the prior payment, in full and in cash, of all
the Obligations. Any amount paid to Guarantor on account of any payment made
hereunder prior to the payment in full of all Obligations and termination or
expiration of Lender's obligations to make any advance under the Loan must be
held in trust for the benefit of Lender hereunder. So long as any Obligations
remain outstanding and the Loan remains in existence, Guarantor shall refrain
from taking any action or commencing any proceeding against Borrower, whether in
connection with a bankruptcy proceeding or otherwise, to recover any amounts in
respect of payments made to Lender under this Guaranty.
6. BANKRUPTCY OF BORROWER. In any bankruptcy or other proceeding in
which the filing of claims is required by law, Guarantor shall file all claims
which Guarantor may have against Borrower relating to any indebtedness of
Borrower to Guarantor and shall assign to Lender all rights of Guarantor
thereunder. If Guarantor does not file any such claim, Lender, as
attorney-in-fact for Guarantor, is hereby authorized to do so in the name of
Guarantor or, in Lender's discretion, to assign the claim to a nominee and to
cause a proof of claim to be filed in the name of Lender's nominee. The
foregoing power of attorney is coupled with an interest and cannot be revoked.
Lender or its nominee have the right, in its reasonable discretion, to accept or
reject any plan proposed in such proceeding and to take any other action which a
party filing a claim is entitled to take. In all such cases, whether in
administration, bankruptcy or otherwise, the Person
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authorized to pay such claim are directed to pay to Lender the amount payable on
such claim and, to the full extent necessary for that purpose, Guarantor hereby
assigns to Lender all of Guarantor's rights to any such payments or
distributions to the extent of Guarantor's obligations hereunder; PROVIDED,
HOWEVER, that Guarantor's obligations hereunder are not satisfied except to the
extent that Lender receives cash by reason of any such payment or distribution.
If Lender receives anything hereunder other than cash, the same may be held as
collateral for amounts due under this Guaranty.
7. MARSHALING OF ASSETS. Lender is under no obligation to marshal any
assets in favor of Guarantor, Borrower or any other guarantor or other Person
liable for the Obligations or against or in payment of any Obligations.
8. RIGHT OF SET-OFF. Lender has a Lien upon, and a right of set-off
against, all credits or other Property of Guarantor now or hereafter in the
possession of or on deposit with Lender or any Person holding such Property for
Lender as security for the Obligations to Lender. Every such Lien and right of
set-off may be exercised without demand or notice to Guarantor. No Lien or right
of set-off may be deemed to have been waived by any act or conduct on the part
of Lender, or by any neglect to exercise such right to set-off or to enforce
such Lien, or by any delay in so doing.
9. DISCLOSURE OF INFORMATION. If Lender elects to sell participations
in the Loan and the Loan Documents, including this Guaranty, Lender may forward
to each participant and prospective participant all documents and information
relating to this Guaranty or to Guarantor, whether furnished by Borrower or
Guarantor or otherwise.
10. LENDER'S RECORDS. Lender's books and records with respect to the
Obligations are admissible in evidence in any action or proceeding, are binding
upon Guarantor for purposes of establishing the items therein set forth and
constitute prima facie proof thereof.
11. ADDITIONAL, INDEPENDENT AND UNSECURED OBLIGATIONS. The obligations
of Guarantor hereunder are in addition to, and do not limit or in any way
affect, the obligations of Guarantor under any other existing or future
guaranties unless the other guaranties are expressly modified or revoked in
writing. This Guaranty is independent of the obligations of Borrower under the
Loan Documents. Lender may bring a separate action to enforce the provisions
hereof against Guarantor without taking action against Borrower or any other
Person or joining Borrower or any other Person as a party to such action. This
Guaranty is not secured and may not be deemed to be secured by any security
instrument unless such security instrument expressly recites that it secures
this Guaranty.
12. TERM; REVIVAL.
(a) This Guaranty is irrevocable by Guarantor. It is a
continuing guaranty and terminates only upon the full satisfaction of the
Obligations. If, notwithstanding the foregoing, Guarantor has any nonwaivable
right under applicable law or otherwise to terminate or revoke this Guaranty,
such termination or revocation is not effective until a written notice of such
termination
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or revocation is received by Lender. Such notice does not affect the right and
power of Lender to enforce rights arising prior to receipt thereof. If Lender
make advances or take any other action after Guarantor's termination or
revocation but prior to receipt of the requisite notice, Lender's rights with
respect thereto are the same as if such termination or revocation had not
occurred.
(b) Guarantor's liability hereunder is reinstated and revived,
and the rights of Lender hereunder continue, with respect to any Obligations at
any time paid by Borrower which Lender is required to restore or return upon the
bankruptcy, insolvency or reorganization of Borrower or for any other reason,
whether by court order, administrative order or settlement, all as though such
amount had not been paid and this Guaranty is reinstated if the Loan had expired
or terminated and all of the Obligations had been satisfied prior to the
restoration or return of the payment.
13. HEADINGS. All headings appearing in this Guaranty are for
convenience only and must be disregarded in construing this Guaranty.
14. CHOICE OF LAW AND VENUE. This Guaranty is deemed to have been made
in the State of Pennsylvania, and the validity of this Guaranty, its
construction, interpretation and enforcement, and the rights of the parties
hereunder, must determined under, governed by and construed in accordance with
the laws of the State of Pennsylvania, without resort to principles of conflicts
of law. Guarantor and Lender consent to the jurisdiction of any local, state or
federal court located in the State of Pennsylvania and waive any objection
relating to improper venue or forum non conveniens to the conduct of any
proceeding by such court.
15. SERVICE OF PROCESS. Guarantor waives personal service of any
process upon it and consents that all service of process may be made by
registered mail, return receipt requested, directed to Guarantor at the address
indicated in the Loan Agreement and service so made deemed to be completed five
(5) business days after same is (1) posted as aforesaid or (2) delivered by any
other process permitted by applicable law.
16. WAIVER OF JURY TRIAL. Guarantor and Lender each waive any right to
have a jury participate in resolving any dispute, whether sounding in contract,
tort, or otherwise, between Lender and Guarantor arising out of, connected with,
related to or incidental to the relationship established between them in
connection with this Guaranty or any other instrument, document or agreement
executed or delivered in connection therewith or the transactions related
thereto. Any such claim, demand, action or cause of action must be decided by
court trial without a jury and either party may file an original counterpart or
a copy of this Guaranty with any court as written evidence of the consent of the
parties hereto to the waiver of their right to trial by jury.
17. ASSIGNMENT; BINDING EFFECT. Guarantor may not assign this Guaranty
without the prior written consent of Lender. This Guaranty is binding upon
Guarantor, its successors and permitted assigns, and inures to the benefit of
Lender and its successors, transferees and assigns.
18. ENTIRE AGREEMENT; MODIFICATIONS. This Guaranty is intended by
Guarantor and Lender to be the final, complete, and exclusive expression of the
agreement between them. This
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Guaranty supersedes all prior and contemporaneous oral and written agreements
relating to the subject matter hereof. Except as may be expressly contemplated
hereby, no modification, rescission, waiver, release, or amendment of any
provision of this Guaranty is made, except by a written agreement signed by
Guarantor and Lender.
19. SEVERABILITY. If any provision of this Guaranty is determined by a
court of competent jurisdiction to be invalid, illegal or unenforceable, that
portion is be deemed severed from this Guaranty and the remaining parts remain
in full force as though the invalid, illegal or unenforceable portion had never
been part of this Guaranty.
20. WAIVERS; REMEDIES. No failure on the part of Lender to exercise, no
delay in exercising and no course of dealing with respect to, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
21. CONSTRUCTION OF GUARANTY. Neither this Guaranty nor any uncertainty
or ambiguity herein may be construed or resolved against Lender on the basis
that this Guaranty was drafted by Lender. On the contrary, this Guaranty has
been negotiated and reviewed by all parties and must be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of the parties hereto.
GUARANTOR:
U.S. DIAGNOSTIC INC.
By: ____________________________________
Name:
Title:
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