GUARANTY
GUARANTY dated as of March 12, 1999, by InterDent, Inc., a Delaware
corporation (the "GUARANTOR"), in favor of Union Bank of California, N.A., as
administrative agent (the "AGENT") for (i) the lenders (the "LENDERS") named
in Schedule 2.01(a) of the Credit Agreement dated as of September 30, 1998,
by and among Gentle Dental Service Corporation, a Washington corporation and
Gentle Dental Management, Inc., a Delaware corporation (the "BORROWERS"), the
Lenders, The Chase Manhattan Bank, as syndication agent and the Agent (as
amended, modified or supplemented from time to time in accordance with its
terms, the "CREDIT AGREEMENT") and (ii) for itself as issuer of the Letters
of Credit. Capitalized terms used herein and not defined herein shall have
the respective meanings assigned to such terms in the Credit Agreement.
The Agent and the Lenders have agreed to extend Loans and certain other
financial accommodations including, without limitation, the issuance of
Letters of Credit to the Borrowers pursuant to, and subject to the terms and
conditions of the Credit Agreement. The obligation of the Lenders to extend
such Loans under the Credit Agreement is conditioned on the execution and
delivery by the Guarantor of a guaranty in the form hereof of the Obligations
(such Obligations to include, without limitation, the due and punctual
payment and performance of (a) the principal of and interest on the Loans,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, (b) all other obligations of the Borrowers
at any time and from time to time under the Credit Agreement and the other
Loan Documents and (e) all obligations of the Guarantor at any time and from
time to time under the Loan Documents.
Accordingly, in consideration of the premises and in order to induce the
Agent and the Lenders to make Loans and extend other financial accommodations
under the Credit Agreement, the Guarantor hereby agrees as follows:
Section 1. GUARANTY. The Guarantor hereby irrevocably and
unconditionally guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, and the punctual performance, of all
present and future Obligations of the Borrowers (the foregoing being herein
referred to as the "GUARANTEED OBLIGATIONS").
Section 2. WAIVER. The Guarantor hereby absolutely, unconditionally and
irrevocably waives, to the fullest extent permitted by law, (i) promptness,
diligence, notice of acceptance and any other notice with respect to this
Guaranty, (ii) presentment,
demand of payment, protest, notice of dishonor or nonpayment and any other
notice with respect to the Guaranteed Obligations, (iii) any requirement that
the Agent or Lenders protect, secure, perfect or insure any security interest
or Lien or any property subject thereto or exhaust any right or take any
action against the Borrowers or any other person or any Collateral, and (iv)
any other action, event or precondition to the enforcement of this Guaranty
or the performance by the Guarantor of the obligations hereunder.
Section 3. GUARANTY ABSOLUTE. (a) The Guarantor guarantees that, to the
fullest extent permitted by law, the Guaranteed Obligations will be paid or
performed strictly in accordance with their terms, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting
any of such terms or the rights of the Agent or any Lender with respect
thereto.
(b) No invalidity, irregularity, voidability, voidness or
unenforceability of the Credit Agreement, the Notes, or any other Loan
Document or any other agreement or instrument relating thereto, or of all or
any part of the Guaranteed Obligations or of any security therefor shall
affect, impair or be a defense to this Guaranty.
(c) This Guaranty is one of payment and performance, not collection, and
the obligations of the Guarantor under this Guaranty are independent of the
Obligations of the Borrowers, and a separate action or actions may be brought
and prosecuted against the Guarantor to enforce this Guaranty, irrespective
of whether any action is brought against the Borrowers or whether the
Borrowers are joined in any such action or actions.
(d) The liability of the Guarantor under this Guaranty shall be absolute
and unconditional irrespective of:
(i) any change in the manner, place or terms of payment or
performance, and/or any change or extension of the time of payment or
performance of, renewal or alteration of, any Obligation, any security
therefor, or any liability incurred directly or indirectly in respect
thereof, or any other amendment or waiver of or any consent to
departure from the Credit Agreement or the Notes or any other Loan
Document, including any increase in the Guaranteed Obligations
resulting from the extension of additional credit to the Borrowers or
any of its subsidiaries or otherwise;
(ii) any sale, exchange, release, surrender, realization upon any
property by whomsoever at any time pledged or mortgaged to secure, or
howsoever securing, all or any of the Guaranteed Obligations, and/or
any offset against, or failure to perfect, or continue the perfection
of, any Lien in any such property, or delay in the perfection of any
such Lien, or any amendment or waiver
of or consent to departure from any other guaranty for all or any of
the Guaranteed Obligations;
(iii) any exercise or failure to exercise any rights against
the Borrowers or others (including the Guarantor);
(iv) any settlement or compromise of any Obligation, any
security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and any subordination of the payment of all or any part
thereof to the payment of any Obligation (whether due or not) of the
Borrowers to creditors of the Borrowers other than the Guarantor;
(v) any manner of application of Collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner
of sale or other disposition of any Collateral for all or any of the
Guaranteed Obligations or any other assets of the Borrowers or any of
its subsidiaries;
(vi) any change, restructuring or termination of the existence
of the Borrowers or any of its subsidiaries; or
(vii) any other agreements or circumstance of any nature
whatsoever which might otherwise constitute a defense available to,
or a discharge of, this Guaranty and/or obligations of the Guarantor
hereunder, or a defense to, or discharge of, the Borrowers or any
other person or party relating to this Guaranty or the obligations of
the Guarantor hereunder or otherwise with respect to the Loans, Letters
of Credit or other financial accommodations to the Borrowers.
(e) The Agent may at any time and from time to time (whether or not
after revocation or termination of this Guaranty) without the consent of, or
notice (except as shall be required by applicable statute and cannot be
waived) to, the Guarantor, and without incurring responsibility to the
Guarantor or impairing or releasing the obligations of the Guarantor
hereunder, apply any sums by whomsoever paid or howsoever realized to any
Guaranteed Obligation regardless of what Guaranteed Obligations remain unpaid.
(f) This Guaranty shall continue to be effective or be reinstated, as
the case may be, if claim is ever made upon the Agent or any Lender for
repayment or recovery of any amount or amounts received by the Agent or such
Lender in payment or on account of any of the Guaranteed Obligations and the
Agent or such Lender repays all or part of said amount by reason of any
judgment, decree or order of any court or administrative body having
jurisdiction over the Agent or such Lender or the respective property of
each, or any settlement or compromise of any such claim effected by the Agent
or such Lender with any such claimant (including the Borrowers), then and in
such event the
Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon the Guarantor, notwithstanding any
revocation hereof or the cancellation of any note (including the Notes) or
other instrument evidencing any Obligation, and the Guarantor shall be and
remain liable to the Agent and/or such Lender hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by the Agent or such Lender.
Section 4. CONTINUING GUARANTY. This Guaranty is a continuing one and
shall (i) remain in full force and effect until the indefeasible payment and
satisfaction in full of the Guaranteed Obligations, (ii) be binding upon the
Guarantor, its successors and assigns, and (iii) inure to the benefit of, and
be enforceable by, the Agent and its successors, transferees and assigns. All
obligations to which this Guaranty applies or may apply under the terms
hereof shall be conclusively presumed to have been created in reliance hereon.
Section 5. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Guarantor
hereby represents, warrants and covenants to and with the Agent that:
(a) The Guarantor has the corporate power to execute
and deliver this Guaranty and to incur and perform its obligations
hereunder;
(b) The Guarantor has duly taken all necessary corporate
action to authorize the execution, delivery and performance of this
Guaranty and to incur and perform its obligations hereunder;
(c) No consent, approval, authorization or other action by,
and no notice to or of, or declaration or filing with, any governmental
or other public body, or any other Person, is required for the due
authorization, execution, delivery and performance by the Guarantor of
this Guaranty or the consummation of the transactions contemplated
hereby;
(d) The execution, delivery and performance by the Guarantor
of this Guaranty do not and will not violate or otherwise conflict with
any term or provision of any material agreement, instrument, judgment,
decree, order or any statute, rule or governmental regulation
applicable to the Guarantor or result in the creation of any Lien upon
any of its properties or assets pursuant thereto;
(e) This Guaranty has been duly authorized, executed and
delivered by the Guarantor and constitutes the legal, valid and binding
obligation of the Guarantor, and is enforceable against the Guarantor
in accordance with its terms, except as enforcement thereof may be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights
generally, and general principles of equity (regardless of whether such
enforcement is sought in a proceeding in equity or at law);
(f) No proceeding referred to in paragraph (e) or (f) of
Article VIII of the Credit Agreement is pending against the Guarantor
and no other event referred to in such Article VIII has occurred and is
continuing, and the property of the Guarantor is not subject to any
assignment for the benefit of creditors;
(g) The capital stock of the Borrowers owned by the Guarantor
on the date hereof consists of all of the authorized, issued and
outstanding capital stock of the Borrowers on the date hereof and the
Borrowers have no outstanding rights, options, warrants or agreements
pursuant to which it may be required to sell any of its capital stock
or other equity security; and
(h) Without the prior written consent of the Agent, own or
operate any assets or properties or engage in any business or other
activity whatsoever (including, without limitation, the incurring of
Indebtedness or the granting of Liens), except for its ownership of the
capital stock of the Borrowers and activities directly in connection
therewith and except as otherwise may be specifically permitted by the
other Loan Documents.
Section 6. EXPENSES. The Guarantor will upon demand reimburse the Agent
for any sums, costs, and expenses which the Agent may pay or incur pursuant
to the provisions of this Guaranty or in negotiating, executing, perfecting,
defending, protecting or enforcing this Guaranty or in enforcing payment of
the Guaranteed Obligations or otherwise in connection with the provisions
hereof, including court costs, collection charges, travel expenses, and
reasonable attorneys' fees, together with interest thereon as specified in
Section 12 hereof.
Section 7. TERMS. (a) All terms defined in the UCC and used herein
shall have the meanings as defined in the UCC, unless the context otherwise
requires.
(b) The words "include," "includes" and "including" shall be deemed to
be followed by the phrase "without limitation".
(c) All references herein to Sections and subsections shall be deemed to
be references to Sections and subsections of this Guaranty unless the context
shall otherwise require.
Section 8. AMENDMENTS AND MODIFICATION. No provision hereof shall be
modified, altered or limited except by written instrument expressly referring
to this Guaranty and to such provision, and executed by the party to be
charged.
Section 9. SUBORDINATION OF SUBROGATION RIGHTS. The Guarantor hereby
waives and releases any and all rights and claims it may now or hereafter
have or acquire against the Borrowers that would constitute it a "creditor"
of the Borrowers for purposes of the Federal Bankruptcy Code, including all
rights of subrogation against the Borrowers and its property and all rights
of indemnification, contribution and reimbursement from the Borrowers and its
property, regardless of whether such rights arise in connection with this
Guaranty, by operation of law, pursuant to contract or otherwise.
Section 10. REMEDIES UPON DEFAULT; RIGHT OF SET-OFF. (a) Upon the
occurrence and during the continuance of any Event of Default, the Agent may,
without notice to or demand upon the Borrowers or the Guarantor, declare any
Guaranteed Obligations immediately due and payable, and shall be entitled to
enforce the obligations of the Guarantor hereunder.
(b) Upon such declaration by the Agent, the Agent and any Lender is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Agent or any Lender to or for the
credit or the account of the Guarantor against any and all of the obligations
of the Guarantor now or hereafter existing under this Guaranty, whether or
not the Agent or such Lender shall have made any demand under this Guaranty
and although such obligations may be contingent and unmatured. The Agent
agrees promptly to notify the Guarantor after any such set-off and
application, PROVIDED that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Agent and
Lenders under this Section 10 are in addition to other rights and remedies
(including other rights of set-off) which the Agent and Lenders may have.
Section 11. STATUTE OF LIMITATIONS. Any acknowledgment or new promise,
whether by payment of principal or interest or otherwise and whether by the
Borrowers or others (including the Guarantor), with respect to any of the
Guaranteed Obligations shall, if the statute of limitations in favor of the
Guarantor against the Agent or Lenders shall have commenced to run, toll the
running of such statute of limitations and, if the period of such statute of
limitations shall have expired, prevent the operation of such statute of
limitations.
Section 12. INTEREST. All amounts payable from time to time by the
Guarantor hereunder shall bear interest at the interest rate per annum
specified in Section 2.08 of the Credit Agreement.
Section 13. RIGHTS AND REMEDIES NOT WAIVED. No act, omission or delay by
the Agent shall constitute a waiver of its rights and remedies hereunder or
otherwise.
No single or partial waiver by the Agent of any default hereunder or right or
remedy which it may have shall operate as a waiver of any other default,
right or remedy or of the same default, right or remedy on a future occasion.
Section 14. ADMISSIBILITY OF GUARANTY. The Guarantor agrees that any
copy of this Guaranty signed by the Guarantor and transmitted by telecopier
for delivery to the Agent shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the
original is in existence.
Section 15. NOTICES. All notices, requests and demands to or upon the
Agent or the Guarantor under this Agreement shall be in writing and given as
provided in the Credit Agreement (with respect to the Guarantor, to the
address of the Borrowers as set forth in the Credit Agreement).
Section 16. COUNTERPARTS. This Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original and all of
which shall together constitute one and the same agreement.
SECTION 17. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL; ETC. (a) ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, OR, AT THE ELECTION OF AGENT, IN THE
COURTS OF THE STATE OF CALIFORNIA OR OF THE UNITED STATES OF AMERICA FOR THE
CENTRAL DISTRICT OF CALIFORNIA AND, BY EXECUTION AND DELIVERY OF THIS
GUARANTY, THE GUARANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS. THE GUARANTOR HEREBY IRREVOCABLY WAIVES, IN CONNECTION WITH
ANY SUCH ACTION OR PROCEEDING, (i) TRIAL BY JURY, (ii) TO THE EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND (iii) THE RIGHT TO
INTERPOSE ANY SET-OFF, COUNTERCLAIM OR CROSS-CLAIM (UNLESS SUCH SET-OFF,
COUNTERCLAIM OR CROSS-CLAIM COULD NOT, BY REASON OF ANY APPLICABLE FEDERAL OR
STATE PROCEDURAL LAWS, BE INTERPOSED, PLEADED OR ALLEGED IN ANY OTHER ACTION).
(b) The Guarantor irrevocably consents to the service of process of any
of the aforementioned courts in any such action or proceeding by the mailing
of copies thereof by certified mail, postage prepaid, to the Guarantor at its
address determined pursuant to Section 15 hereof.
(c) Nothing herein shall affect the right of the Agent to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against the Guarantor in any other jurisdiction.
(d) The Guarantor hereby waives presentment, notice of dishonor and
protests of all instruments included in or evidencing any of the Guaranteed
Obligations, and any and all other notices and demands whatsoever (except as
expressly provided herein).
SECTION 18. GOVERNING LAW. THIS GUARANTY AND THE GUARANTEED OBLIGATIONS
SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED IN SUCH STATE, WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
Section 19. CAPTIONS; SEPARABILITY. (a) The captions of the Sections
and subsections of this Guaranty have been inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of
this Guaranty.
(b) If any term of this Guaranty shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall in no way be
affected thereby.
Section 20. ACKNOWLEDGMENT OF RECEIPT. The Guarantor acknowledges
receipt of a copy of this Guaranty and each of the Loan Documents.
IN WITNESS WHEREOF, the Guarantor has duly executed or caused this
Guaranty to be duly executed as of the date first above set forth.
INTERDENT, INC., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Co-Chairman and
Chief Executive Officer
