GUARANTY AGREEMENT
WHEREAS, PRIME REFRACTIVE MANAGEMENT, L.L.C., a Delaware limited
liability company ("Borrower"), has entered into a Loan Agreement of even date
herewith with certain banks and other lending institutions which are or may from
time to time become signatories thereto, BANKBOSTON, N.A., a national banking
association, as documentation agent for itself and the other Lenders, BANK OF
AMERICA, N.A. ("B of A"), a national banking association, as administrative
agent for itself and the other Lenders (in such capacity, together with its
successors in such capacity, the "Administrative Agent"), pursuant to which the
Lenders have agreed to make an advancing term loan to the Borrower with advances
thereunder not to exceed an aggregate principal amount of Fourteen Million and
00/100 Dollars at any time outstanding ($14,000,000.00) (such Loan Agreement, as
may be amended, extended, restated, supplemented or modified from time to time,
the "Loan Agreement"); terms defined in the Loan Agreement and not otherwise
defined herein are used herein as defined therein; and
WHEREAS, the Agents and the Lenders have conditioned their obligations
under the Loan Agreement upon the execution and delivery by Guarantors
(hereinafter defined) of this Guaranty Agreement (this "Guaranty");
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, each of the undersigned (individually, a
"Guarantor" and collectively, the "Guarantors"), hereby jointly and severally,
irrevocably and unconditionally guarantees to the Agents, and to the Lenders,
the full and prompt payment and performance of the Guaranteed Indebtedness
(hereinafter defined), this Guaranty being upon the following terms:
1 . The term "Guaranteed Indebtedness", as used herein means all of the
Obligations and shall include any and all post-petition interest and expenses
(including attorneys' fees) whether or not allowed under any bankruptcy,
insolvency, or other similar law.
2. This Guaranty shall be an absolute, continuing, irrevocable, and
unconditional guaranty of payment and performance, and not a guaranty of
collection, and each Guarantor shall remain liable on its obligations hereunder
until the payment and performance in full of the Guaranteed Indebtedness and
termination of the Commitments. No set-off, counterclaim, recoupment, reduction,
or diminution of any obligation, or any defense of any kind or nature which
Borrower may have against any Agent, any Lender or any other party, or which any
Guarantor may have against Borrower or any other party (other than the Agents or
any Lender), shall be available to, or shall be asserted by, any Guarantor
against any Agent, any Lender or any subsequent holder of the Guaranteed
Indebtedness or any part thereof or against payment of the Guaranteed
Indebtedness or any part thereof.
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3. Notwithstanding any contrary provision, it is the intention of each
Guarantor, Lenders, and Agents that the amount of the Guaranteed Indebtedness
guaranteed by each Guarantor by this Guaranty shall be, but not in excess of,
the maximum amount permitted by fraudulent conveyance, fraudulent transfer, or
similar Laws applicable to such Guarantor. Accordingly, notwithstanding anything
to the contrary contained in this Guaranty or any other agreement or instrument
executed in connection with the payment of any of the Guaranteed Indebtedness,
the amount of the Guaranteed Indebtedness guaranteed by any Guarantor by this
Guaranty shall be limited to an aggregate amount equal to the largest amount
that would not render such Guarantor's obligations hereunder subject to
avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provision of any applicable state law.
4. If any Guarantor becomes liable for any indebtedness owing by
Borrower to any Agent or any Lender by endorsement or otherwise, other than
under this Guaranty, such liability shall not be in any manner impaired or
affected hereby, and the rights of the Agents and the Lenders hereunder shall be
cumulative of any and all other rights that the Agents and the Lenders may ever
have against such Guarantor. The exercise by the Agents or any Lender of any
right or remedy hereunder or under any other instrument, or at law or in equity,
shall not preclude the concurrent or subsequent exercise of any other right or
remedy.
5. In the event of default by Borrower in payment or performance of the
Guaranteed Indebtedness, or any part thereof, when such Guaranteed Indebtedness
becomes due, whether by its terms, by acceleration, or otherwise, Guarantors
shall promptly pay the amount due thereon to the Administrative Agent, for the
benefit of the Lenders, upon demand in lawful currency of the United States of
America and it shall not be necessary for the Administrative Agent, in order to
enforce such payment by Guarantors, first to institute suit or exhaust its
remedies against Borrower or others liable on such Guaranteed Indebtedness, or
to enforce any rights against any collateral which shall ever have been given to
secure such Guaranteed Indebtedness.
6. If acceleration of the time for payment of any amount payable by
Borrower under the Guaranteed Indebtedness is stayed upon the insolvency,
bankruptcy, or reorganization of Borrower, all such amounts otherwise subject to
acceleration under the terms of the Guaranteed Indebtedness shall nonetheless be
payable by Guarantors hereunder forthwith on demand by the Administrative Agent.
7. Each Guarantor hereby agrees that its obligations under this
Guaranty shall not be released, discharged, diminished, impaired, reduced, or
affected for any reason or by the occurrence of any event, including, without
limitation, one or more of the following events, whether or not with notice to
or the consent of such Guarantor: (a) the taking or accepting of collateral as
security for any or all of the Guaranteed Indebtedness or the sale, release,
surrender, exchange, or subordination of any collateral now or hereafter
securing any or all of the Guaranteed Indebtedness; (b) any partial release of
the liability of any Guarantor hereunder, or the full or partial release of
Borrower or any other guarantor from liability for any or all of the Guaranteed
Indebtedness; (c) the dissolution, insolvency, or bankruptcy of Borrower, any
Guarantor, or any other party at any time liable for the payment of any or all
of the Guaranteed Indebtedness; (d) any renewal, extension, modification,
waiver, amendment, or rearrangement of any or all of the Guaranteed Indebtedness
or any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Indebtedness; (e) any adjustment,
indulgence, forbearance, waiver, settlement, or compromise that may be granted
or given by any Agent or any Lender to Borrower, any Guarantor, or any other
party ever liable for any or all of the Guaranteed Indebtedness; (f) the
subordination of the payment of all or any part of the Guaranteed Indebtedness
to the payment of any obligations, indebtedness, or liabilities which may be due
or become due to any of the Agents, any of the Lenders or others; (g) the
application of any deposit balance, fund, payment, collections through process
of law or otherwise, or other collateral of Borrower to the satisfaction and
liquidation of the indebtedness or obligations of Borrower to Agents or any of
the Lenders, if any, not guaranteed under this Guaranty; (h) the application of
any sums paid to any of the Agents or any of the Lenders by any Guarantor, any
other guarantor of all or any part of the Guaranteed Indebtedness, Borrower or
others to the Guaranteed Indebtedness in such order and manner as any Agent may
determine in accordance with the Loan Agreement; (i) any neglect, delay,
omission, failure, or refusal of any Agent or any Lender to take or prosecute
any action for the collection of any of the Guaranteed Indebtedness or to
foreclose or take or prosecute any action in connection with any instrument,
document, or agreement evidencing, securing, or otherwise relating to any or all
of the Guaranteed Indebtedness; (j) the unenforceability or invalidity of any or
all of the Guaranteed Indebtedness or of any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the Guaranteed
Indebtedness; (k) any payment by Borrower or any other party to any Agent or any
Lender is held to constitute a preference under applicable bankruptcy or
insolvency law or if for any other reason any Agent or any Lender is required to
refund any payment or pay the amount thereof to someone else; (l) the settlement
or compromise of any of the Guaranteed Indebtedness; (m) the non-perfection of
any security interest or lien securing any or all of the Guaranteed
Indebtedness; (n) any impairment of any collateral securing any or all of the
Guaranteed Indebtedness; (o) the failure of any Agent or any Lender to sell any
collateral securing any or all of the Guaranteed Indebtedness in a commercially
reasonable manner or as otherwise required by law; (p) any change in the
corporate existence, structure, or ownership of Borrower; (q) any other
circumstance which might otherwise constitute a defense available to, or
discharge of, Borrower; (r) the unenforceability of all or any part of the
Guaranteed Indebtedness against Borrower by reason of the fact that the
Guaranteed Indebtedness exceeds the amount permitted by law; (s) the act of
creating all or any part of the Guaranteed Indebtedness is ultra xxxxx; or (t)
the officers creating all or any part of the Guaranteed Indebtedness acted in
excess of their authority.
8. Each Guarantor hereby represents and warrants to the Agents and the
Lenders the following:
(a) This Guaranty may reasonably be expected to benefit, directly
or indirectly, each Guarantor.
(b) Each Guarantor is familiar with, and has independently
reviewed the books and records regarding, the financial condition of
Borrower and is familiar with the value of any and all collateral
intended to be security for the payment of all or any part of the
Guaranteed Indebtedness. However, no Guarantor is relying on such
financial condition or collateral as an inducement to enter into this
Guaranty.
(c) Each Guarantor has adequate means to obtain from Borrower
on a continuing basis information concerning the financial condition of
Borrower, and no Guarantor is relying on the Agents or the Lenders to
provide such information to any Guarantor either now or in the future.
(d) Each Guarantor has the power and authority to execute,
deliver, and perform this Guaranty and any other agreements executed by
such Guarantor contemporaneously herewith, and the execution, delivery,
and performance of this Guaranty and any other agreements executed by
each Guarantor contemporaneously herewith do not and will not violate
(i) any agreement or instrument to which any Guarantor is a party, or
(ii) any law, rule, regulation, or order of any Governmental Authority
to which any Guarantor is subject.
(e) Neither the Agents, the Lenders, nor any other party has
made any representation, warranty, or statement to any Guarantor in
order to induce any Guarantor to execute this Guaranty.
(f) The financial statements and other financial information
regarding Guarantors heretofore and hereafter delivered to any Agent or
any Lender are and shall be true and correct in all material respects
and fairly present the financial position of Guarantors as of the dates
thereof, and no material adverse change has occurred in the financial
condition of any Guarantor as reflected in those financial disclosures.
(g) As of the date hereof, and after giving effect to this
Guaranty and the obligations evidenced hereby, (i) each Guarantor is
and will be Solvent (to the extent necessary, taking into account any
rights of contribution, reimbursement and subrogation), (ii) the fair
saleable value of each Guarantor's assets exceeds and will continue to
exceed its liabilities (both fixed and contingent), (iii) each
Guarantor is and will continue to be able to pay its debts as they
mature, and (iv) each Guarantor has and will continue to have
sufficient capital to carry on its business and all businesses in which
it is about to engage.
(h) All representations and warranties about each Guarantor made
in the Loan Agreement are true and correct.
9. Each Guarantor covenants and agrees that, as long as the Guaranteed
Indebtedness or any part thereof is outstanding or any Lender has any Commitment
under the Loan Agreement:
(a) No Guarantor shall, so long as its obligations under this
Guaranty continue, transfer or pledge any material portion of its
assets for less than full and adequate consideration.
(b) Each Guarantor shall promptly furnish to the
Administrative Agent at any time and from time to time such financial
statements and other financial information as the Administrative Agent
may require, in form and substance satisfactory to the Administrative
Agent.
(c) Each Guarantor shall comply with all terms and provisions
of the Loan Documents that apply to such Guarantor.
(d) Each Guarantor shall promptly inform the Administrative
Agent of (i) any litigation or governmental investigation against such
Guarantor or affecting any security for all or any part of the
Guaranteed Indebtedness or this Guaranty which, if determined
adversely, might have a material adverse effect upon the financial
condition of such Guarantor or upon such security or might cause a
default under any of the Loan Documents, (ii) any claim or controversy
which might become the subject of such litigation or governmental
investigation, and (iii) any material adverse change in the financial
condition of Guarantor.
10. (a) Each Guarantor hereby agrees that the Subordinated Indebtedness
(hereinafter defined) shall be subordinate and junior in right of payment to the
prior payment in full of all Guaranteed Indebtedness, and each Guarantor hereby
assigns the Subordinated Indebtedness to the Administrative Agent, for the
benefit of the Lenders, as security for the Guaranteed Indebtedness. If any sums
shall be paid to any Guarantor by Borrower or any other person or entity on
account of the Subordinated Indebtedness, such sums shall be held in trust by
such Guarantor for the benefit of the Administrative Agent and shall forthwith
be paid to the Administrative Agent without affecting the liability of any
Guarantor under this Guaranty and may be applied by the Administrative Agent and
the Lenders against the Guaranteed Indebtedness in such order and manner as the
Administrative Agent and the Lenders may determine in their sole discretion.
Upon the request of the Administrative Agent, each Guarantor shall execute,
deliver, and endorse to the Administrative Agent such documents and instruments
as the Administrative Agent may request to perfect, preserve, and enforce its
rights hereunder. For purposes of this Guaranty, the term "Subordinated
Indebtedness" means all indebtedness, liabilities, and obligations of Borrower
to any Guarantor, whether such indebtedness, liabilities, and obligations now
exist or are hereafter incurred or arise, or whether the obligations of Borrower
thereon are direct, indirect, contingent, primary, secondary, several, joint and
several, or otherwise, and irrespective of whether such indebtedness,
liabilities, or obligations are evidenced by a note, contract, open account, or
otherwise, and irrespective of the person or persons in whose favor such
indebtedness, obligations, or liabilities may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by any Guarantor.
(b) Each Guarantor agrees that any and all liens, security
interests, judgment liens, charges, or other encumbrances upon Borrower's assets
securing payment of any Subordinated Indebtedness shall be and remain inferior
and subordinate to any and all liens, security interests, judgment liens,
charges, or other encumbrances upon Borrower's assets securing payment of the
Guaranteed Indebtedness or any part thereof, regardless of whether such
encumbrances in favor of any Guarantor or the Administrative Agent presently
exist or are hereafter created or attached. Without the prior written consent of
the Lenders, no Guarantor shall (i) file suit against Borrower or exercise or
enforce any other creditor's right it may have against Borrower, or (ii)
foreclose, repossess, sequester, or otherwise take steps or institute any action
or proceedings judicial or otherwise, including without limitation the
commencement of, or joinder in, any liquidation, bankruptcy, rearrangement,
debtor's relief or insolvency proceeding) to enforce any liens, security
interests, collateral rights, judgments or other encumbrances held by any
Guarantor on assets of Borrower.
(c) In the event of any receivership, bankruptcy,
reorganization, rearrangement, debtor's relief, or other insolvency proceeding
involving Borrower as debtor, the Administrative Agent shall have the right to
prove and vote any claim under the Subordinated Indebtedness and to receive
directly from the receiver, trustee or other court custodian all dividends,
distributions, and payments made in respect of the Subordinated Indebtedness.
The Administrative Agent and the Lenders may apply any such dividends,
distributions, and payments against the Guaranteed Indebtedness in such order
and manner as the Administrative Agent and the Lenders may determine in their
sole discretion.
(d) Each Guarantor agrees that all promissory notes, accounts
receivable, ledgers, records, or any other evidence of Subordinated Indebtedness
shall contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Guaranty.
11. Each Guarantor waives (a) promptness, diligence, and notice of
acceptance of this Guaranty and notice of the incurring of any obligation,
indebtedness, or liability to which this Guaranty applies or may apply and
waives presentment for payment, notice of nonpayment, protest, demand, notice of
protest, notice of intent to accelerate, notice of acceleration, notice of
dishonor, diligence in enforcement, and indulgences of every kind, and (b) the
taking of any other action by the Administrative Agent, including without
limitation, giving any notice of default or any other notice to, or making any
demand on, Borrower, any other guarantor of all or any part of the Guaranteed
Indebtedness or any other party. To the maximum extent lawful, each Guarantor
waives all rights by which it might be entitled to require suit on an accrued
right of action in respect of any Guaranteed Indebtedness or require suit
against Borrower or others, whether arising under ss. 34.02 of the Texas
Business and Commerce Code, as amended (regarding its right to require
Administrative Agent or Lenders to xxx Borrower on accrued right of action
following its written notice to Administrative Agent or Lenders), ss. 17.001 of
the Texas Civil Practice and Remedies Code, as amended (allowing suit against it
without suit against Borrower, but precluding entry of judgment against it
before entry of judgment against Borrower), Rule 31 of the Texas Rules of Civil
Procedure, as amended (requiring Administrative Agent or Lenders to join
Borrower in any suit against it unless judgment has been previously entered
against Borrower), or otherwise.
12. In addition to any other waivers, agreements and covenants of
Guarantors set forth herein, each Guarantor hereby further waives and releases
all claims, causes of action, defenses and offsets for any act or omission of
the Administrative Agent, its directors, officers, employees, representatives or
agents in connection with the Administrative Agent's administration of the
Guaranteed Indebtedness, except for the Administrative Agent's willful
misconduct and gross negligence.
13. This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of all or any part of the Guaranteed
Indebtedness is rescinded or must otherwise be returned by any Agent or any
Lender upon the insolvency, bankruptcy, or reorganization of Borrower, any
Guarantor, any other guarantor of all or any part of the Guaranteed
Indebtedness, or otherwise, all as though such payment had not been made.
14. Any acknowledgment or new promise, whether by payment of principal
or interest or otherwise and whether by Borrower or others (including
Guarantors), with respect to any of the Guaranteed Indebtedness shall, if the
statute of limitations in favor of any Guarantor against the Administrative
Agent or any Lender 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.
15. This Guaranty is for the benefit of the Agents and the Lenders and
their respective successors and assigns, and in the event of an assignment of
the Guaranteed Indebtedness, or any part thereof, the rights and benefits
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty is binding not only on
Guarantors, but on each Guarantor's successors and assigns.
16. Each Guarantor recognizes that the Agents and the Lenders are
relying upon this Guaranty and the undertakings of each Guarantor hereunder in
making extensions of credit to Borrower under the Loan Agreement and further
recognizes that the execution and delivery of this Guaranty is a material
inducement to the Agents and the Lenders in entering into the Loan Agreement.
Each Guarantor hereby acknowledges that there are no conditions to the full
effectiveness of this Guaranty.
17. This Guaranty is a Loan Document and, therefore, this Guaranty is
subject to the applicable provisions of the Loan Agreement, all of which
applicable provisions are incorporated herein by reference the same as if set
forth herein verbatim. Moreover, each Guarantor acknowledges and agrees that
this Guaranty is subject to the offset provisions in favor of the Lenders in the
Loan Agreement.
18. Each Guarantor expressly assumes all responsibilities to remain
informed of the financial condition of Borrower and any circumstances affecting
(a) Borrower's ability to perform under the Loan Agreement and the other Loan
Documents to which it is a party or (b) any collateral securing all or any part
of the Guaranteed Indebtedness.
19. In the event that any Guarantor is entitled to receive any notice
under the Uniform Commercial Code, as it exists in the state governing any such
notice, of the sale or other disposition of any collateral securing all or any
part of the Guaranteed Indebtedness or this Guaranty, reasonable notice shall be
deemed given when such notice is deposited in the United States mail, postage
prepaid, at the address for Guarantor set forth on the signature page of this
Guaranty, five days prior to the date any public sale, or after which any
private sale, of any such collateral is to be held; provided, however, that
notice given in any other reasonable manner or at any other reasonable time
shall be sufficient.
20. No delay on the part of the Administrative Agent in exercising any
right hereunder or failure to exercise the same shall operate as a waiver of
such right. In no event shall any waiver of the provisions of this Guaranty be
effective unless the same be in writing and signed by the appropriate parties in
accordance with the Loan Agreement, and then only in the specific instance and
for the purpose given.
21. Nothing contained herein shall be construed as an obligation on the
part of the Agents or the Lenders to extend or continue to extend credit to
Borrower.
22. Notwithstanding any other provision of this Guaranty or of any
instrument or agreement evidencing, governing or securing all or any part of the
Guaranteed Indebtedness, each Guarantor and the Administrative Agent by its
acceptance hereof agree that no Guarantor shall ever be required or obligated to
pay interest in excess of the maximum nonusurious interest rate as may be
authorized by applicable law for the written contracts which constitute the
Guaranteed Indebtedness. It is the intention of Guarantors, the Agents, and the
Lenders to conform strictly to the applicable laws which limit interest rates,
and any of the aforesaid contracts for interest, if and to the extent payable by
Guarantors, shall be held to be subject to reduction to the maximum nonusurious
interest rate allowed under said law.
23. THIS GUARANTY IS EXECUTED AND DELIVERED AS AN INCIDENT TO A LENDING
TRANSACTION CONSUMMATED AND PERFORMABLE IN XXXXXX COUNTY, TEXAS, AND SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
24. Each Guarantor shall pay on demand all reasonable attorneys' fees
and all other costs and expenses incurred by the Agents or any Lender in
connection with the enforcement or collection of this Guaranty.
25. THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF GUARANTORS,
THE AGENTS AND THE LENDERS WITH RESPECT TO GUARANTORS' GUARANTY OF THE
GUARANTEED INDEBTEDNESS AND RESTATES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY GUARANTORS, THE AGENTS AND
THE LENDERS AS A FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND
NO COURSE OF DEALING BETWEEN ANY GUARANTOR, THE AGENTS OR THE LENDERS, NO COURSE
OF PERFORMANCE, NO TRADE PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY
NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS
GUARANTY. THERE ARE NO ORAL AGREEMENTS AMONG GUARANTORS, THE AGENTS AND THE
LENDERS.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES FOLLOW.]
EXECUTED as of the 31st day of January, 2000.
GUARANTORS:
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PROSTATHERAPIES, INC.,
a Delaware corporation
LITHOTRIPTORS, INC.,
a North Carolina corporation
FASTSTART, INC.,
a North Carolina corporation
NATIONAL LITHOTRIPTORS ASSOCIATION,
a North Carolina corporation
R.R. LITHO, INC.,
a Delaware corporation
OHIO LITHO, INC.,
a Delaware corporation
MEDTECH INVESTMENT, INC.,
a North Carolina corporation
PRIME MEDICAL OPERATING, INC.,
a Delaware corporation
PRIME MANAGEMENT, INC.,
a Nevada corporation
PRIME LITHOTRIPTER OPERATIONS, INC.,
a New York corporation
PRIME DIAGNOSTIC SERVICES, INC.,
a Delaware corporation
PRIME LITHOTRIPSY SERVICES, INC.,
a New York corporation
PRIME DIAGNOSTIC CORP. OF FLORIDA,
a Delaware corporation
SUN MEDICAL TECHNOLOGIES, INC.,
a California corporation
PRIME PRACTICE MANAGEMENT, INC.,
a New York corporation
PRIME CARDIAC REHABILITATION SERVICES,
INC., a Delaware corporation
ALABAMA RENAL STONE INSTITUTE, INC.,
an Alabama corporation
PRIME KIDNEY STONE TREATMENT, INC.,
a New Jersey corporation
SUN ACQUISITION, INC.,
a California corporation
EXECUTIVE MEDICAL ENTERPRISES, INC.,
a Delaware corporation
PRIME RVC, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Treasurer
PRIME MEDICAL MANAGEMENT, L.P.,
a Delaware limited partnership
By: Prime Medical Operating, Inc.,
a Delaware corporation, its
General Partner
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Treasurer
PRIME REFRACTIVE, L.L.C.
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Treasurer
Address for Notices:
0000 Xxxxxxx xx Xxxxx Xxxxxxx
Xxxxx X-000
Xxxxxx, Xxxxx 00000
Attn: President
Fax Number: (000) 000-0000
Telephone Number: (000) 000-0000
GUARANTY AGREEMENT
WHEREAS, PRIME REFRACTIVE MANAGEMENT, L.L.C., a Delaware limited
liability company ("Borrower"), has entered into a Loan Agreement of even date
herewith with certain banks and other lending institutions which are or may from
time to time become signatories thereto, BANKBOSTON, N.A., a national banking
association, as documentation agent for itself and the other Lenders, BANK OF
AMERICA, N.A. ("B of A"), a national banking association, as administrative
agent for itself and the other Lenders (in such capacity, together with its
successors in such capacity, the "Administrative Agent"), pursuant to which the
Lenders have agreed to make an advancing term loan to the Borrower with advances
thereunder not to exceed an aggregate principal amount of Fourteen Million and
00/100 Dollars ($14,000,000.00) (such Loan Agreement, as may be amended,
extended, restated, supplemented or modified from time to time, the "Loan
Agreement"); terms defined in the Loan Agreement and not otherwise defined
herein are used herein as defined therein; and
WHEREAS, the Agents and the Lenders have conditioned their obligations
under the Loan Agreement upon the execution and delivery by Guarantor
(hereinafter defined) of this Guaranty Agreement (this "Guaranty");
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the undersigned ("Guarantor"), hereby irrevocably
and unconditionally guarantees to the Agents, and to the Lenders, the full and
prompt payment and performance of the Guaranteed Indebtedness (hereinafter
defined), this Guaranty being upon the following terms:
1 . The term "Guaranteed Indebtedness", as used herein means all of the
Obligations and shall include any and all post-petition interest and expenses
(including attorneys' fees) whether or not allowed under any bankruptcy,
insolvency, or other similar law.
2. This Guaranty shall be an absolute, continuing, irrevocable, and
unconditional guaranty of payment and performance, and not a guaranty of
collection, and Guarantor shall remain liable on its obligations hereunder until
the payment and performance in full of the Guaranteed Indebtedness and
termination of the Commitments. No set-off, counterclaim, recoupment, reduction,
or diminution of any obligation, or any defense of any kind or nature which
Borrower may have against any Agent, any Lender or any other party, or which
Guarantor may have against Borrower or any other party (other than the Agents or
any Lender), shall be available to, or shall be asserted by, Guarantor against
any Agent, any Lender or any subsequent holder of the Guaranteed Indebtedness or
any part thereof or against payment of the Guaranteed Indebtedness or any part
thereof.
3. Notwithstanding any contrary provision, it is the intention of
Guarantor, Lenders, and Agents that the amount of the Guaranteed Indebtedness
guaranteed by Guarantor by this Guaranty shall be, but not in excess of, the
maximum amount permitted by fraudulent conveyance, fraudulent transfer, or
similar Laws applicable to Guarantor. Accordingly, notwithstanding anything to
the contrary contained in this Guaranty or any other agreement or instrument
executed in connection with the payment of any of the Guaranteed Indebtedness,
the amount of the Guaranteed Indebtedness guaranteed by Guarantor by this
Guaranty shall be limited to an aggregate amount equal to the largest amount
that would not render Guarantor's obligations hereunder subject to avoidance
under Section 548 of the United States Bankruptcy Code or any comparable
provision of any applicable state law.
12
4. If Guarantor becomes liable for any indebtedness owing by Borrower
to any Agent or any Lender by endorsement or otherwise, other than under this
Guaranty, such liability shall not be in any manner impaired or affected hereby,
and the rights of the Agents and the Lenders hereunder shall be cumulative of
any and all other rights that the Agents and the Lenders may ever have against
Guarantor. The exercise by the Agents or any Lender of any right or remedy
hereunder or under any other instrument, or at law or in equity, shall not
preclude the concurrent or subsequent exercise of any other right or remedy.
5. In the event of default by Borrower in payment or performance of the
Guaranteed Indebtedness, or any part thereof, when such Guaranteed Indebtedness
becomes due, whether by its terms, by acceleration, or otherwise, Guarantor
shall promptly pay the amount due thereon to the Administrative Agent, for the
benefit of the Lenders, upon demand in lawful currency of the United States of
America and it shall not be necessary for the Administrative Agent, in order to
enforce such payment by Guarantor, first to institute suit or exhaust its
remedies against Borrower or others liable on such Guaranteed Indebtedness, or
to enforce any rights against any collateral which shall ever have been given to
secure such Guaranteed Indebtedness.
6. If acceleration of the time for payment of any amount payable by
Borrower under the Guaranteed Indebtedness is stayed upon the insolvency,
bankruptcy, or reorganization of Borrower, all such amounts otherwise subject to
acceleration under the terms of the Guaranteed Indebtedness shall nonetheless be
payable by Guarantor hereunder forthwith on demand by the Administrative Agent.
7. Guarantor hereby agrees that its obligations under this Guaranty
shall not be released, discharged, diminished, impaired, reduced, or affected
for any reason or by the occurrence of any event, including, without limitation,
one or more of the following events, whether or not with notice to or the
consent of Guarantor: (a) the taking or accepting of collateral as security for
any or all of the Guaranteed Indebtedness or the sale, release, surrender,
exchange, or subordination of any collateral now or hereafter securing any or
all of the Guaranteed Indebtedness; (b) any partial release of the liability of
Guarantor hereunder, or the full or partial release of Borrower or any other
guarantor from liability for any or all of the Guaranteed Indebtedness; (c) the
dissolution, insolvency, or bankruptcy of Borrower, Guarantor, or any other
party at any time liable for the payment of any or all of the Guaranteed
Indebtedness; (d) any renewal, extension, modification, waiver, amendment, or
rearrangement of any or all of the Guaranteed Indebtedness or any instrument,
document, or agreement evidencing, securing, or otherwise relating to any or all
of the Guaranteed Indebtedness; (e) any adjustment, indulgence, forbearance,
waiver, settlement, or compromise that may be granted or given by any Agent or
any Lender to Borrower, Guarantor, or any other party ever liable for any or all
of the Guaranteed Indebtedness; (f) the subordination of the payment of all or
any part of the Guaranteed Indebtedness to the payment of any obligations,
indebtedness, or liabilities which may be due or become due to any of the
Agents, any of the Lenders or others; (g) the application of any deposit
balance, fund, payment, collections through process of law or otherwise, or
other collateral of Borrower to the satisfaction and liquidation of the
indebtedness or obligations of Borrower to Agents or any of the Lenders, if any,
not guaranteed under this Guaranty; (h) the application of any sums paid to any
of the Agents or any of the Lenders by Guarantor, any other guarantor of all or
any part of the Guaranteed Indebtedness, Borrower or others to the Guaranteed
Indebtedness in such order and manner as any Agent may determine in accordance
with the Loan Agreement; (i) any neglect, delay, omission, failure, or refusal
of any Agent or any Lender to take or prosecute any action for the collection of
any of the Guaranteed Indebtedness or to foreclose or take or prosecute any
action in connection with any instrument, document, or agreement evidencing,
securing, or otherwise relating to any or all of the Guaranteed Indebtedness;
(j) the unenforceability or invalidity of any or all of the Guaranteed
Indebtedness or of any instrument, document, or agreement evidencing, securing,
or otherwise relating to any or all of the Guaranteed Indebtedness; (k) any
payment by Borrower or any other party to any Agent or any Lender is held to
constitute a preference under applicable bankruptcy or insolvency law or if for
any other reason any Agent or any Lender is required to refund any payment or
pay the amount thereof to someone else; (l) the settlement or compromise of any
of the Guaranteed Indebtedness; (m) the non-perfection of any security interest
or lien securing any or all of the Guaranteed Indebtedness; (n) any impairment
of any collateral securing any or all of the Guaranteed Indebtedness; (o) the
failure of any Agent or any Lender to sell any collateral securing any or all of
the Guaranteed Indebtedness in a commercially reasonable manner or as otherwise
required by law; (p) any change in the corporate existence, structure, or
ownership of Borrower; (q) any other circumstance which might otherwise
constitute a defense available to, or discharge of, Borrower; (r) the
unenforceability of all or any part of the Guaranteed Indebtedness against
Borrower by reason of the fact that the Guaranteed Indebtedness exceeds the
amount permitted by law; (s) the act of creating all or any part of the
Guaranteed Indebtedness is ultra xxxxx; or (t) the officers creating all or any
part of the Guaranteed Indebtedness acted in excess of their authority.
8. Guarantor hereby represents and warrants to the Agents and the Lenders
the following:
(a) This Guaranty may reasonably be expected to benefit, directly
or indirectly, Guarantor.
(b) Guarantor is familiar with, and has independently reviewed
the books and records regarding, the financial condition of Borrower
and is familiar with the value of any and all collateral intended to be
security for the payment of all or any part of the Guaranteed
Indebtedness. However, Guarantor is not relying on such financial
condition or collateral as an inducement to enter into this Guaranty.
(c) Guarantor has adequate means to obtain from Borrower on a
continuing basis information concerning the financial condition of
Borrower, and Guarantor is not relying on the Agents or the Lenders to
provide such information to Guarantor either now or in the future.
(d) Guarantor has the power and authority to execute, deliver,
and perform this Guaranty and any other agreements executed by such
Guarantor contemporaneously herewith, and the execution, delivery, and
performance of this Guaranty and any other agreements executed by
Guarantor contemporaneously herewith do not and will not violate (i)
any agreement or instrument to which Guarantor is a party, or (ii) any
law, rule, regulation, or order of any Governmental Authority to which
Guarantor is subject.
(e) Neither the Agents, the Lenders, nor any other party has
made any representation, warranty, or statement to Guarantor in order
to induce any Guarantor to execute this Guaranty.
(f) The financial statements and other financial information
regarding Guarantor heretofore and hereafter delivered to any Agent or
any Lender are and shall be true and correct in all material respects
and fairly present the financial position of Guarantor as of the dates
thereof, and no material adverse change has occurred in the financial
condition of Guarantor as reflected in those financial disclosures.
(g) As of the date hereof, and after giving effect to this
Guaranty and the obligations evidenced hereby, (i) Guarantor is and
will be Solvent (to the extent necessary, taking into account any
rights of contribution, reimbursement and subrogation), (ii) the fair
saleable value of Guarantor's assets exceeds and will continue to
exceed its liabilities (both fixed and contingent), (iii) Guarantor is
and will continue to be able to pay its debts as they mature, and (iv)
Guarantor has and will continue to have sufficient capital to carry on
its business and all businesses in which it is about to engage.
(h) All representations and warranties about Guarantor made in
the Loan Agreement are true and correct.
9. Guarantor hereby represents and warrants to the Agents and the
Lenders that (for purposes of Sections 9 and 10, all capitalized terms not
otherwise defined shall have the meanings assigned thereto in the Fourth Amended
and Restated Loan Agreement dated the date hereof (the "Prime Agreement") among
Guarantor, B of A, as administrative agent, BankBoston, N.A., as documentation
agent, and the lenders from time to time defined therein; provided, that the
terms "Loan Documents", "Obligations", "Agents", "Lenders", "Guarantors",
"Administrative Agent", "Agent", "Collateral", "Guaranty
Agreement","Commitment", shall have the meaning assigned thereto in the Loan
Agreement):
9.1 Existence.
(a) Corporate Existence. Each of the Companies (other than the Excepted
Subsidiaries and the Partnerships): (a) is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation; (b) has all requisite corporate power and authority to own its
assets and carry on its business as now being or as proposed to be conducted;
and (c) is qualified to do business in all jurisdictions in which the nature of
its business makes such qualification necessary and where failure to so qualify
would have a material adverse effect on the business, condition (financial or
otherwise), operations, or properties of the Companies taken as a whole,
Guarantor, or any Material Subsidiary. Each Company (other than the Excepted
Subsidiaries) has the corporate power and authority to execute, deliver, and
perform its obligations under this Guaranty Agreement and the other Loan
Documents to which it is or may become a party.
(b) Partnership Existence. Each of the Partnerships: (a) is a general
partnership, limited partnership or limited liability company, as appropriate,
duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its formation; (b) has all requisite partnership power and
authority or company power and authority, as appropriate, to own its assets and
carry on its business as now being or as proposed to be conducted; and (c) is
qualified to do business in all jurisdictions in which the nature of its
business makes such qualification necessary and where failure to so qualify
would have a material adverse effect on the business, condition (financial or
otherwise), operations, or properties of the Companies taken as a whole,
Guarantor, or any Material Subsidiary.
9.2 Financial Statements. Guarantor has delivered to the Administrative
Agent audited consolidated financial statements of the Companies as of and for
the fiscal year ended December 31, 1998, and unaudited consolidated financial
statements of Guarantor for the nine (9) month period ended September 30, 1999.
Such financial statements have been prepared in accordance with GAAP, and fairly
present, on a consolidated basis, the financial condition of the Companies and
Litho and the Partnerships, as appropriate, as of the respective dates indicated
therein and the results of operations for the respective periods indicated
therein. There has been no material adverse change in the business, condition
(financial or otherwise), operations, or properties of the Companies taken as a
whole, Guarantor, or any Material Subsidiary since the effective date of the
most recent financial statements referred to in this Section.
9.3 Corporate Action: No Breach. The execution, delivery, and performance
by each Company of the Loan Documents to which such Company is or may become a
party and compliance with the terms and provisions hereof and thereof have been
duly authorized by all requisite corporate action (or, if such Company is a
partnership, then partnership action) on the part of such Company and do not and
will not (a) violate or conflict with, or result in a breach of, or require any
consent under (i) the articles of incorporation or bylaws of such Company (or,
if such Company is a partnership, then the partnership agreement of such
Company), (ii) any material applicable law, rule, or regulation or any material
order, writ, injunction, or decree of any Governmental Authority or arbitrator,
or (iii) any material agreement or instrument to which such Company is a party
or by which such Company or any of its property is bound or subject (other than
agreements and instruments relating to Debt which will be paid off with the
proceeds of the initial Advance), or (b) constitute a material default under any
such agreement or instrument (other than agreements and instruments relating to
Debt which will be paid off with the proceeds of the initial Advance), or result
in the creation or imposition of any Lien (except as provided in Article V of
the Prime Agreement) upon any of the revenues or assets of any of the Companies.
9.4 Operation of Business. Each of the Companies (other than the
Excepted Subsidiaries) possesses all licenses, permits, franchises, patents,
copyrights, trademarks, and tradenames, or rights thereto, necessary to conduct
their respective businesses substantially as now conducted and as presently
proposed to be conducted. None of the Companies is in violation of any valid
rights of others with respect to any of the foregoing (except where the failure
to do so would not have a material adverse effect on the business, condition
(financial or otherwise), operations or properties of the Companies taken as a
whole, Guarantor, or any Material Subsidiary).
9.5 Litigation and Judgments. As of the date hereof, except as
disclosed on Schedule 7.5 to the Prime Agreement, there is no action, suit,
investigation, or proceeding before or by any Governmental Authority or
arbitrator pending, or to the knowledge of Guarantor, threatened against or
affecting any of the Companies, that would, if adversely determined, have a
material adverse effect on the business, condition (financial or otherwise),
operations or properties of the Companies taken as a whole, Guarantor, or any
Material Subsidiary or the ability of Guarantor to pay and perform the
Obligations. There are no outstanding judgments against any Company.
9.6 Rights in Properties; Liens. Each of the Companies has good and
indefeasible title to or valid leasehold interests in their respective material
properties and assets, real and personal, including the properties, assets, and
leasehold interests reflected in the financial statements described in Section
9.2, and none of the properties, assets, or leasehold interests of any Company
is subject to any Lien, except as permitted by Section 9.2 of the Prime
Agreement.
9.7 Enforceability. This Guaranty Agreement constitutes, and the other
Loan Documents to which Guarantor is a party, when delivered, shall constitute
the legal, valid, and binding obligations of Borrower, enforceable against
Guarantor in accordance with their respective terms, except as limited by
bankruptcy, insolvency, or other laws of general application relating to the
enforcement of creditors' rights. The Loan Documents to which each other Company
is a party, when delivered, shall constitute the legal, valid, and binding
obligations of such Company, enforceable against such Company in accordance with
their respective terms, except as limited by bankruptcy, insolvency, or other
laws of general application relating to the enforcement of creditors' rights.
9.8 Approvals. No authorization, approval, or consent of, and no filing
or registration with, any Governmental Authority or third party is or will be
necessary for the execution, delivery, or performance by Guarantor or any
Company of this Guaranty Agreement and the other Loan Documents to which
Guarantor or any Company is or may become a party or for the validity or
enforceability thereof.
9.9 Debt. As of the date hereof, the Companies have no Debt, except as
disclosed on Schedule 7.9 to the Prime Agreement.
9.10 Taxes. The Companies (other than the Excepted Subsidiaries) have
filed or extended all tax returns (federal, state, and local) required to be
filed, including all income, franchise, employment, property, and sales tax
returns, and have paid all of their respective liabilities for taxes,
assessments, governmental charges, and other levies that are due and payable
other than certain state tax returns required to be filed on or before the date
hereof. Except as previously disclosed to the Administrative Agent in writing,
no Company knows of any pending investigation of any of them by any taxing
authority or of any pending but unassessed tax liability of any of them, except
relating to the Excepted Subsidiaries.
9.11 Use of Proceeds; Margin Securities. No Company is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulations T, U, or X of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Advance will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying margin stock, except for purchases of Guarantor's
capital stock permitted by Section 9.4 of the Prime Agreement.
9.12 ERISA. The Companies are in compliance in all material respects
with all applicable provisions of ERISA. Neither a Reportable Event nor a
Prohibited Transaction has occurred and is continuing with respect to any Plan.
No notice of intent to terminate a Plan has been filed, nor has any Plan been
terminated. No circumstances exist which constitute grounds entitling the PBGC
to institute proceedings to terminate, or appoint a trustee to administer, a
Plan, nor has the PBGC instituted any such proceedings. None of the Companies
nor any ERISA Affiliate has completely or partially withdrawn from a
Multi-employer Plan. The Companies and each ERISA Affiliate have met their
minimum funding requirements under ERISA with respect to all of their Plans, and
the present value of all vested benefits under each Plan does not exceed the
fair market value of all Plan assets allocable to such benefits, as determined
on the most recent valuation, date of the Plan and in accordance with ERISA.
None of the Companies nor any ERISA Affiliate has incurred any liability to the
PBGC under ERISA.
9.13 Disclosure. All factual information (taken as a whole) furnished
by or on behalf of Guarantor in writing to any Agent or any Lender (including,
without limitation, all factual information contained in the Loan Documents) for
purposes of or in connection with this Guaranty Agreement, the other Loan
Documents or any transaction contemplated herein or therein is, and all other
such factual information (taken as a whole) hereafter furnished by or on behalf
of Guarantor in writing will be, true and accurate in all material respects on
the date as of which such factual information is dated or certified and is not
(and such factual information (taken as a whole) hereafter furnished will not
be) incomplete by omitting to state any facts necessary to make such factual
information (taken as a whole) not misleading in any material respect at such
time in light of the circumstances under which such factual information was
provided.
9.14 Subsidiaries; Partnerships. Each of the Guarantors is a direct or
indirect wholly-owned Subsidiary of Guarantor, and as of the date hereof,
together with the Partnerships listed on Schedule 3 to the Prime Agreement,
constitute all of the Subsidiaries of Guarantor. Schedule 7.14.1 to the Prime
Agreement, as the same may be amended from time to time to reflect transactions
permitted by this Agreement, sets forth the outstanding shares of capital stock
(or other ownership interests) and the name of each shareholder of each of the
Subsidiaries of Guarantor. All of the outstanding capital stock of Guarantor and
each of its Subsidiaries has been validly issued, is fully paid, and is
nonassessable. Schedule 7.14.2 to the Prime Agreement, as the same may be
amended from time to time to reflect transactions permitted by this Guaranty
Agreement, sets forth the outstanding partnership interests of the Partnerships
owned by each of the Companies.
9.15 Agreements. Except for the Senior Subordinated Indenture, the
Senior Subordinated Notes, and as set forth on Schedule 7.15 to the Prime
Agreement, none of the Companies is a party to any indenture, loan, or credit
agreement, or to any lease or other agreement or instrument, or subject to any
charter or corporate restriction which could reasonably be expected to have a
material adverse effect on the business, condition (financial or otherwise),
operations or properties of the Companies taken as a whole, Guarantor, or any
Material Subsidiary or the ability of Guarantor or any Guarantor to pay and
perform its obligations under the Loan Documents to which it is a party. None of
the Companies is in default in any material respect in the performance,
observance, or fulfillment of any of the obligations, covenants, or conditions
contained in any agreement or instrument to which it is a party, which default,
in the aggregate with all such other defaults, would have a material adverse
affect on the business, condition (financial or otherwise), operations or
properties of the Companies taken as a whole, Guarantor, or any Material
Subsidiary.
9.16 Compliance with Legal Requirements; Governmental Authorizations.
(a) Except for the Excepted Subsidiaries and as set forth in Schedule
7.16.1 to the Prime Agreement: (i) each Company is in compliance in all material
respects with each Legal Requirement that is or was applicable to it or to the
conduct or operation of its business or the ownership or use of any of its
assets; and (ii) no Company has received any notice or other communication from
any Governmental Authority or other Person of any event or circumstance which
could constitute a violation of, or failure to comply with, any Legal
Requirement.
(b) Except for the Excepted Subsidiaries and as set forth in Schedule
7.16 to the Prime Agreement: (i) each Company is in material compliance with all
of the terms and requirements of each Governmental Authorization held by such
Company; (ii) no Company has received any notice or other communication from any
Governmental Authority or other Person of, any event or circumstance which could
constitute a violation of, or failure to comply with, any term or requirement of
any Governmental Authorization, or of any actual or potential revocation,
withdrawal, cancellation or termination of, or material modification to, any
Governmental Authorization; (iii) all applications required to have been filed
for the renewal of any required Governmental Authorizations have been duly filed
on a timely basis with the appropriate Governmental Authorities, and all other
filings required to have been made with respect to such Governmental
Authorizations have been duly made on a timely basis with the appropriate
Governmental Authorities; (iv) all Governmental Authorizations of the Companies
are transferable to the Companies; (v) upon consummation of the transactions
contemplated hereby, the Companies will lawfully hold all such Governmental
Authorizations; and (vi) none of such Governmental Authorizations will terminate
upon consummation of the transactions contemplated hereby. Except for the
Excepted Subsidiaries and as set forth on Schedule 7.16 to the Prime Agreement,
each of the Companies possesses the necessary Governmental Authorizations (i)
necessary to permit each Company to lawfully conduct and operate its respective
business in the manner it currently conducts and operates such business and to
permit such Company to own and use its assets in the manner in which it
currently owns and uses such assets, and (ii) necessary to permit each Company,
upon the consummation of the transactions contemplated hereby, to lawfully
conduct and operate its business and to permit each Company to own and use its
assets, where the failure to have such Governmental Authorization would have a
material adverse effect on the business, condition (financial or otherwise),
operations or properties of the Companies taken as a whole, Guarantor, or any
Material Subsidiary.
9.17 Investment Company Act. No Company is an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
9.18 Public Utility Holding Company Act. No Company is a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate" of a
"holding company" or a "public utility" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
9.19 Environmental Matters. Except as disclosed on Schedule 7.19 to the
Prime Agreement, as the same may be amended from time to time, hereto:
(a) Each of the Companies and all of their respective properties,
assets, and operations are in compliance in all material respects with all
Environmental Laws. No Company is aware of, nor have any of them received notice
of, any past, present, or future conditions, events, activities, practices, or
incidents which may interfere with or prevent the material compliance or
continued material compliance of any Company with all material Environmental
Laws; and
(b) The Companies have obtained all material permits, licenses and
authorizations that are required under applicable Environmental Laws, and all
such permits are in good standing and each Company is in compliance is all
material respects with all of the terms and conditions of such permits.
9.20 Year 2000 Compliance. Guarantor represents that it is aware of the
possible impact of the year 2000 problem (that is, the risk that computer
applications may not be able to properly perform date-sensitive functions after
December 31, 1999) upon its computer applications and on-going business.
Borrower represents that any corrective action necessary will be taken and that
the year 2000 problem will not result in a material adverse change in the
Companies' business condition (financial or otherwise), operations, properties
or prospects, or ability to repay the Obligations.
10. Guarantor agrees to deliver to Administrative Agent each of the
items described in Section 8.1 of the Prime Agreement on the same dates required
by the Prime Agreement. In addition, Guarantor will perform and observe each of
the following positive covenants so long as the Obligations or any part thereof
are outstanding or any Lender has any Commitment under the Loan Agreement:
10.1 Maintenance of Existence; Conduct of Business. Guarantor will
preserve and maintain its corporate existence and all of its leases, privileges,
licenses, permits, franchises, qualifications, and rights that are necessary or
desirable in the ordinary conduct of its business. Guarantor will cause each of
its Subsidiaries other than the Excepted Subsidiaries, to preserve and maintain
its corporate, partnership or other similar existence and all of its leases,
privileges, licenses, permits, franchises, qualifications and rights that are
necessary or desirable in the ordinary conduct of its business, except, in each
case, where failure to do so would not have a material adverse effect on the
business, condition (financial or otherwise), operations or properties of the
Companies taken as a whole, Guarantor, or any Material Subsidiary. Guarantor
will conduct, and will cause each of its Subsidiaries to conduct, its business
in an orderly and efficient manner in accordance with good business practices.
10.2 Maintenance of Properties. Guarantor will maintain, keep, and
preserve, and cause each of its Subsidiaries to maintain, keep, and preserve,
all of its properties (tangible and intangible) necessary or useful in the
proper conduct of its business in good working order and condition, except, in
each case, as permitted by Section 9.8 of the Prime Agreement or 9.9 of the
Prime Agreement or where the failure to do so would not have a material adverse
effect on the business, condition (financial or otherwise), operations or
properties of the Companies taken as a whole, Guarantor, or any Material
Subsidiary.
10.3 Taxes and Claims. Guarantor will pay or discharge, and will cause
each of its Subsidiaries other than the Excepted Subsidiaries, to pay or
discharge, at or before maturity or before becoming delinquent (a) all material
taxes, levies, assessments, and governmental charges imposed on it or its income
or profits or any of its material property, and (b) all material lawful claims
for labor, material, and supplies, which, if unpaid, might become a Lien upon
any of its property; provided, however, that no Company shall be required to pay
or discharge any tax, levy, assessment, or governmental charge which is being
contested in good faith by appropriate proceedings diligently pursued, and for
which adequate reserves have been established.
10.4 Insurance. Guarantor will maintain, and will cause each of its
Subsidiaries to maintain (except in the case of the Partnerships, in which case
Guarantor shall maintain for the Partnerships), insurance with financially sound
and reputable insurance companies in such amounts and covering such risks as is
usually carried by corporations engaged in similar businesses and owning similar
properties in the same general areas in which the Companies operate, consistent
with past practices of the Companies and to the extent available on commercially
reasonable terms, provided that in any event Guarantor will maintain and cause
each of its Subsidiaries (except in the case of the Partnerships, in which case
Guarantor shall maintain for the Partnerships) to maintain workmen's
compensation insurance, property insurance, comprehensive general liability
insurance, professional liability insurance, and business interruption insurance
reasonably satisfactory to the Lenders. Each insurance policy covering
Collateral shall name the Administrative Agent as loss payee, for the benefit of
the Lenders, as its interests may appear and shall provide that such policy will
not be canceled or reduced without thirty (30) days' prior written notice to the
Administrative Agent. Guarantor will annually provide the Administrative Agent
with all certificates of insurance evidencing all policies of insurance of
Guarantor and its Subsidiaries.
10.5 Inspection Rights. At any reasonable time and from time to time
after reasonable notice to Guarantor, Guarantor will permit, and will cause each
of its Subsidiaries to permit, representatives of the Administrative Agent and
each Lender to examine, copy, and make extracts from its books and records, to
visit and inspect its properties, and to discuss its business, operations, and
financial condition with its officers, and independent certified public
accountants. Prior to removing any such copies or extracts from a Company's
premises, such Company's representatives shall be provided a reasonable
opportunity to review such information and xxxx or identify it as "confidential"
or "confidential information" as reasonably deemed appropriate by such Company.
10.6 Keeping Books and Records. Guarantor will maintain, and will cause
each of its Subsidiaries to maintain, proper books of record and account in
which full, true, and correct entries in conformity with GAAP shall be made of
all dealings and transactions in relation to its business and activities.
10.7 Compliance with Laws. Guarantor will comply, and will cause each
of its Subsidiaries to comply, in all material respects with all material
applicable laws, rules, regulations, orders, and decrees of any Governmental
Authority or arbitrator.
10.8 Compliance with Agreements. Guarantor will comply, and will cause
each of its Subsidiaries to comply, in all material respects with all
agreements, contracts, and instruments binding on it or affecting its properties
or business, except where the failure to do so would not have a material adverse
effect on the business, condition (financial or otherwise), operations or
properties of the Companies taken as a whole, Guarantor, or any Material
Subsidiary.
10.9 Further Assurances. Guarantor will (a), and will cause each of its
Subsidiaries (other than the Partnerships) to, execute and deliver such further
agreements and instruments and take such further action as may be reasonably
requested by the Administrative Agent to carry out the provisions and purposes
of this Guaranty Agreement and the other Loan Documents and, (b) and will cause
each of its Subsidiaries (including the Partnerships) to, create, preserve, and
perfect the Liens of the Administrative Agent, for the benefit of the Lenders,
in the Collateral.
10.10 ERISA. Guarantor will comply, and will cause each of its
Subsidiaries to comply, with all minimum funding requirements, and all other
material requirements, of ERISA, if applicable, so as not to give rise to any
liability thereunder.
10.11 Information Relating to Proposed Acquisitions. Guarantor will use
its best efforts to keep the Administrative Agent and the Lenders informed of
the relevant information and status of and will share with the Administrative
Agent and the Lenders and provide copies to the extent possible, of all material
due diligence information relating to any proposed Permitted Refractive
Acquisition with respect to which Guarantor or any Subsidiary enters into a
letter of intent or acquisition agreement, during the term of this Guaranty
Agreement.
11. Guarantor covenants and agrees that, as long as the Guaranteed
Indebtedness or any part thereof is outstanding or any Lender has any Commitment
under the Loan Agreement:
(a) No Guarantor shall, so long as its obligations under this
Guaranty continue, transfer or pledge any material portion of its
assets for less than full and adequate consideration.
(b) Each Guarantor shall promptly furnish to the
Administrative Agent at any time and from time to time such financial
statements and other financial information as the Administrative Agent
may require, in form and substance satisfactory to the Administrative
Agent.
(c) Each Guarantor shall comply with all terms and provisions
of the Loan Documents that apply to such Guarantor.
(d) Each Guarantor shall promptly inform the Administrative
Agent of (i) any litigation or governmental investigation against such
Guarantor or affecting any security for all or any part of the
Guaranteed Indebtedness or this Guaranty which, if determined
adversely, might have a material adverse effect upon the financial
condition of such Guarantor or upon such security or might cause a
default under any of the Loan Documents, (ii) any claim or controversy
which might become the subject of such litigation or governmental
investigation, and (iii) any material adverse change in the financial
condition of Guarantor.
12. (a) Guarantor hereby agrees that the Subordinated Indebtedness
(hereinafter defined) shall be subordinate and junior in right of payment to the
prior payment in full of all Guaranteed Indebtedness, and Guarantor hereby
assigns the Subordinated Indebtedness to the Administrative Agent, for the
benefit of the Lenders, as security for the Guaranteed Indebtedness. If any sums
shall be paid to Guarantor by Borrower or any other person or entity on account
of the Subordinated Indebtedness, such sums shall be held in trust by Guarantor
for the benefit of the Administrative Agent and shall forthwith be paid to the
Administrative Agent without affecting the liability of Guarantor under this
Guaranty and may be applied by the Administrative Agent and the Lenders against
the Guaranteed Indebtedness in such order and manner as the Administrative Agent
and the Lenders may determine in their sole discretion. Upon the request of the
Administrative Agent, Guarantor shall execute, deliver, and endorse to the
Administrative Agent such documents and instruments as the Administrative Agent
may request to perfect, preserve, and enforce its rights hereunder. For purposes
of this Guaranty, the term "Subordinated Indebtedness" means all indebtedness,
liabilities, and obligations of Borrower to Guarantor, whether such
indebtedness, liabilities, and obligations now exist or are hereafter incurred
or arise, or whether the obligations of Guarantor thereon are direct, indirect,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such indebtedness, liabilities, or obligations are
evidenced by a note, contract, open account, or otherwise, and irrespective of
the person or persons in whose favor such indebtedness, obligations, or
liabilities may, at their inception, have been, or may hereafter be created, or
the manner in which they have been or may hereafter be acquired by Guarantor.
(b) Guarantor agrees that any and all liens, security
interests, judgment liens, charges, or other encumbrances upon Borrower's assets
securing payment of any Subordinated Indebtedness shall be and remain inferior
and subordinate to any and all liens, security interests, judgment liens,
charges, or other encumbrances upon Borrower's assets securing payment of the
Guaranteed Indebtedness or any part thereof, regardless of whether such
encumbrances in favor of Guarantor or the Administrative Agent presently exist
or are hereafter created or attached. Without the prior written consent of the
Lenders, Guarantor shall not (i) file suit against Guarantor or exercise or
enforce any other creditor's right it may have against Guarantor, or (ii)
foreclose, repossess, sequester, or otherwise take steps or institute any action
or proceedings judicial or otherwise, including without limitation the
commencement of, or joinder in, any liquidation, bankruptcy, rearrangement,
debtor's relief or insolvency proceeding) to enforce any liens, security
interests, collateral rights, judgments or other encumbrances held by Guarantor
on assets of Borrower.
(c) In the event of any receivership, bankruptcy,
reorganization, rearrangement, debtor's relief, or other insolvency proceeding
involving Guarantor as debtor, the Administrative Agent shall have the right to
prove and vote any claim under the Subordinated Indebtedness and to receive
directly from the receiver, trustee or other court custodian all dividends,
distributions, and payments made in respect of the Subordinated Indebtedness.
The Administrative Agent and the Lenders may apply any such dividends,
distributions, and payments against the Guaranteed Indebtedness in such order
and manner as the Administrative Agent and the Lenders may determine in their
sole discretion.
(d) Guarantor agrees that all promissory notes, accounts
receivable, ledgers, records, or any other evidence of Subordinated Indebtedness
shall contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Guaranty.
13. Guarantor waives (a) promptness, diligence, and notice of
acceptance of this Guaranty and notice of the incurring of any obligation,
indebtedness, or liability to which this Guaranty applies or may apply and
waives presentment for payment, notice of nonpayment, protest, demand, notice of
protest, notice of intent to accelerate, notice of acceleration, notice of
dishonor, diligence in enforcement, and indulgences of every kind, and (b) the
taking of any other action by the Administrative Agent, including without
limitation, giving any notice of default or any other notice to, or making any
demand on, Guarantor, any other guarantor of all or any part of the Guaranteed
Indebtedness or any other party. To the maximum extent lawful, each Guarantor
waives all rights by which it might be entitled to require suit on an accrued
right of action in respect of any Guaranteed Indebtedness or require suit
against Guarantor or others, whether arising under ss. 34.02 of the Texas
Business and Commerce Code, as amended (regarding its right to require
Administrative Agent or Lenders to xxx Guarantor on accrued right of action
following its written notice to Administrative Agent or Lenders), ss. 17.001 of
the Texas Civil Practice and Remedies Code, as amended (allowing suit against it
without suit against Guarantor, but precluding entry of judgment against it
before entry of judgment against Guarantor), Rule 31 of the Texas Rules of Civil
Procedure, as amended (requiring Administrative Agent or Lenders to join
Guarantor in any suit against it unless judgment has been previously entered
against Guarantor), or otherwise.
14. In addition to any other waivers, agreements and covenants of
Guarantor set forth herein, Guarantor hereby further waives and releases all
claims, causes of action, defenses and offsets for any act or omission of the
Administrative Agent, its directors, officers, employees, representatives or
agents in connection with the Administrative Agent's administration of the
Guaranteed Indebtedness, except for the Administrative Agent's willful
misconduct and gross negligence.
15. This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of all or any part of the Guaranteed
Indebtedness is rescinded or must otherwise be returned by any Agent or any
Lender upon the insolvency, bankruptcy, or reorganization of Guarantor,
Guarantor, any other guarantor of all or any part of the Guaranteed
Indebtedness, or otherwise, all as though such payment had not been made.
16. Any acknowledgment or new promise, whether by payment of principal
or interest or otherwise and whether by Guarantor or others (including
Guarantor), with respect to any of the Guaranteed Indebtedness shall, if the
statute of limitations in favor of Guarantor against the Administrative Agent or
any Lender 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.
17. This Guaranty is for the benefit of the Agents and the Lenders and
their respective successors and assigns, and in the event of an assignment of
the Guaranteed Indebtedness, or any part thereof, the rights and benefits
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty is binding not only on
Guarantor, but on Guarantor's successors and assigns.
18. Guarantor recognizes that the Agents and the Lenders are relying
upon this Guaranty and the undertakings of Guarantor hereunder in making
extensions of credit to Guarantor under the Loan Agreement and further
recognizes that the execution and delivery of this Guaranty is a material
inducement to the Agents and the Lenders in entering into the Loan Agreement.
Guarantor hereby acknowledges that there are no conditions to the full
effectiveness of this Guaranty.
19. This Guaranty is a Loan Document and, therefore, this Guaranty is
subject to the applicable provisions of the Loan Agreement, all of which
applicable provisions are incorporated herein by reference the same as if set
forth herein verbatim. Moreover, Guarantor acknowledges and agrees that this
Guaranty is subject to the offset provisions in favor of the Lenders in the Loan
Agreement.
20. Guarantor expressly assumes all responsibilities to remain informed
of the financial condition of Guarantor and any circumstances affecting (a)
Guarantor's ability to perform under the Loan Agreement and the other Loan
Documents to which it is a party or (b) any collateral securing all or any part
of the Guaranteed Indebtedness.
21. In the event that Guarantor is entitled to receive any notice under
the Uniform Commercial Code, as it exists in the state governing any such
notice, of the sale or other disposition of any collateral securing all or any
part of the Guaranteed Indebtedness or this Guaranty, reasonable notice shall be
deemed given when such notice is deposited in the United States mail, postage
prepaid, at the address for Guarantor set forth on the signature page of this
Guaranty, five days prior to the date any public sale, or after which any
private sale, of any such collateral is to be held; provided, however, that
notice given in any other reasonable manner or at any other reasonable time
shall be sufficient.
22. No delay on the part of the Administrative Agent in exercising any
right hereunder or failure to exercise the same shall operate as a waiver of
such right. In no event shall any waiver of the provisions of this Guaranty be
effective unless the same be in writing and signed by the appropriate parties in
accordance with the Loan Agreement, and then only in the specific instance and
for the purpose given.
23. Nothing contained herein shall be construed as an obligation on the
part of the Agents or the Lenders to extend or continue to extend credit to
Guarantor.
24. Notwithstanding any other provision of this Guaranty or of any
instrument or agreement evidencing, governing or securing all or any part of the
Guaranteed Indebtedness, Guarantor and the Administrative Agent by its
acceptance hereof agree that no Guarantor shall ever be required or obligated to
pay interest in excess of the maximum nonusurious interest rate as may be
authorized by applicable law for the written contracts which constitute the
Guaranteed Indebtedness. It is the intention of Guarantor, the Agents, and the
Lenders to conform strictly to the applicable laws which limit interest rates,
and any of the aforesaid contracts for interest, if and to the extent payable by
Guarantor, shall be held to be subject to reduction to the maximum nonusurious
interest rate allowed under said law.
25. THIS GUARANTY IS EXECUTED AND DELIVERED AS AN INCIDENT TO A LENDING
TRANSACTION CONSUMMATED AND PERFORMABLE IN XXXXXX COUNTY, TEXAS, AND SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
26. Guarantor shall pay on demand all reasonable attorneys' fees and
all other costs and expenses incurred by the Agents or any Lender in connection
with the enforcement or collection of this Guaranty.
27. THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF GUARANTOR,
THE AGENTS AND THE LENDERS WITH RESPECT TO GUARANTOR'S GUARANTY OF THE
GUARANTEED INDEBTEDNESS AND RESTATES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY GUARANTOR, THE AGENTS AND
THE LENDERS AS A FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND
NO COURSE OF DEALING BETWEEN GUARANTOR, THE AGENTS OR THE LENDERS, NO COURSE OF
PERFORMANCE, NO TRADE PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY
NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS
GUARANTY. THERE ARE NO ORAL AGREEMENTS AMONG GUARANTOR, THE AGENTS AND THE
LENDERS.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES FOLLOW.]
EXECUTED as of the 31st day of January, 2000.
GUARANTOR:
---------
PRIME MEDICAL SERVICES, INC.
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Vice President-Treasurer
Address for Notices:
0000 Xxxxxxx xx Xxxxx Xxxxxxx
Xxxxx X-000
Xxxxxx, Xxxxx 00000
Attn: Treasurer
Fax Number: (000) 000-0000
Telephone Number: (000) 000-0000
GUARANTY AGREEMENT
WHEREAS, PRIME MEDICAL SERVICES, INC., a Delaware corporation
("Borrower"), has entered into a Fourth Amended and Restated Loan Agreement of
even date herewith with certain banks and other lending institutions which are
or may from time to time become signatories thereto, BANKBOSTON, N.A., a
national banking association, as documentation agent for itself and the other
Lenders, BANK OF AMERICA, N.A. ("B of A"), a national banking association, as
administrative agent for itself and the other Lenders (in such capacity,
together with its successors in such capacity, the "Administrative Agent"),
pursuant to which the Lenders have agreed to make a revolving credit loan to the
Borrower with advances thereunder not to exceed an aggregate principal amount of
Eighty-Six Million and 00/100 Dollars at any time outstanding ($86,000,000.00)
(such Fourth Amended and Restated Loan Agreement, as may be amended, extended,
restated, supplemented or modified from time to time, the "Loan Agreement");
terms defined in the Loan Agreement and not otherwise defined herein are used
herein as defined therein; and
WHEREAS, the Agents and the Lenders have conditioned their obligations
under the Loan Agreement upon the execution and delivery by Guarantors
(hereinafter defined) of this Guaranty Agreement (this "Guaranty");
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, each of the undersigned (individually, a
"Guarantor" and collectively, the "Guarantors"), hereby jointly and severally,
irrevocably and unconditionally guarantees to the Agents, and to the Lenders,
the full and prompt payment and performance of the Guaranteed Indebtedness
(hereinafter defined), this Guaranty being upon the following terms:
1 . The term "Guaranteed Indebtedness", as used herein means all of the
Obligations and shall include any and all post-petition interest and expenses
(including attorneys' fees) whether or not allowed under any bankruptcy,
insolvency, or other similar law.
2. This Guaranty shall be an absolute, continuing, irrevocable, and
unconditional guaranty of payment and performance, and not a guaranty of
collection, and each Guarantor shall remain liable on its obligations hereunder
until the payment and performance in full of the Guaranteed Indebtedness and
termination of the Commitments. No set-off, counterclaim, recoupment, reduction,
or diminution of any obligation, or any defense of any kind or nature which
Borrower may have against any Agent, any Lender or any other party, or which any
Guarantor may have against Borrower or any other party (other than the Agents or
any Lender), shall be available to, or shall be asserted by, any Guarantor
against any Agent, any Lender or any subsequent holder of the Guaranteed
Indebtedness or any part thereof or against payment of the Guaranteed
Indebtedness or any part thereof.
3. Notwithstanding any contrary provision, it is the intention of each
Guarantor, Lenders, and Agents that the amount of the Guaranteed Indebtedness
guaranteed by each Guarantor by this Guaranty shall be, but not in excess of,
the maximum amount permitted by fraudulent conveyance, fraudulent transfer, or
similar Laws applicable to such Guarantor. Accordingly, notwithstanding anything
to the contrary contained in this Guaranty or any other agreement or instrument
executed in connection with the payment of any of the Guaranteed Indebtedness,
the amount of the Guaranteed Indebtedness guaranteed by any Guarantor by this
Guaranty shall be limited to an aggregate amount equal to the largest amount
that would not render such Guarantor's obligations hereunder subject to
avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provision of any applicable state law.
7
4. If any Guarantor becomes liable for any indebtedness owing by
Borrower to any Agent or any Lender by endorsement or otherwise, other than
under this Guaranty, such liability shall not be in any manner impaired or
affected hereby, and the rights of the Agents and the Lenders hereunder shall be
cumulative of any and all other rights that the Agents and the Lenders may ever
have against such Guarantor. The exercise by the Agents or any Lender of any
right or remedy hereunder or under any other instrument, or at law or in equity,
shall not preclude the concurrent or subsequent exercise of any other right or
remedy.
5. In the event of default by Borrower in payment or performance of the
Guaranteed Indebtedness, or any part thereof, when such Guaranteed Indebtedness
becomes due, whether by its terms, by acceleration, or otherwise, Guarantors
shall promptly pay the amount due thereon to the Administrative Agent, for the
benefit of the Lenders, upon demand in lawful currency of the United States of
America and it shall not be necessary for the Administrative Agent, in order to
enforce such payment by Guarantors, first to institute suit or exhaust its
remedies against Borrower or others liable on such Guaranteed Indebtedness, or
to enforce any rights against any collateral which shall ever have been given to
secure such Guaranteed Indebtedness.
6. If acceleration of the time for payment of any amount payable by
Borrower under the Guaranteed Indebtedness is stayed upon the insolvency,
bankruptcy, or reorganization of Borrower, all such amounts otherwise subject to
acceleration under the terms of the Guaranteed Indebtedness shall nonetheless be
payable by Guarantors hereunder forthwith on demand by the Administrative Agent.
7. Each Guarantor hereby agrees that its obligations under this
Guaranty shall not be released, discharged, diminished, impaired, reduced, or
affected for any reason or by the occurrence of any event, including, without
limitation, one or more of the following events, whether or not with notice to
or the consent of such Guarantor: (a) the taking or accepting of collateral as
security for any or all of the Guaranteed Indebtedness or the sale, release,
surrender, exchange, or subordination of any collateral now or hereafter
securing any or all of the Guaranteed Indebtedness; (b) any partial release of
the liability of any Guarantor hereunder, or the full or partial release of
Borrower or any other guarantor from liability for any or all of the Guaranteed
Indebtedness; (c) the dissolution, insolvency, or bankruptcy of Borrower, any
Guarantor, or any other party at any time liable for the payment of any or all
of the Guaranteed Indebtedness; (d) any renewal, extension, modification,
waiver, amendment, or rearrangement of any or all of the Guaranteed Indebtedness
or any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Indebtedness; (e) any adjustment,
indulgence, forbearance, waiver, settlement, or compromise that may be granted
or given by any Agent or any Lender to Borrower, any Guarantor, or any other
party ever liable for any or all of the Guaranteed Indebtedness; (f) the
subordination of the payment of all or any part of the Guaranteed Indebtedness
to the payment of any obligations, indebtedness, or liabilities which may be due
or become due to any of the Agents, any of the Lenders or others; (g) the
application of any deposit balance, fund, payment, collections through process
of law or otherwise, or other collateral of Borrower to the satisfaction and
liquidation of the indebtedness or obligations of Borrower to Agents or any of
the Lenders, if any, not guaranteed under this Guaranty; (h) the application of
any sums paid to any of the Agents or any of the Lenders by any Guarantor, any
other guarantor of all or any part of the Guaranteed Indebtedness, Borrower or
others to the Guaranteed Indebtedness in such order and manner as any Agent may
determine in accordance with the Loan Agreement; (i) any neglect, delay,
omission, failure, or refusal of any Agent or any Lender to take or prosecute
any action for the collection of any of the Guaranteed Indebtedness or to
foreclose or take or prosecute any action in connection with any instrument,
document, or agreement evidencing, securing, or otherwise relating to any or all
of the Guaranteed Indebtedness; (j) the unenforceability or invalidity of any or
all of the Guaranteed Indebtedness or of any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the Guaranteed
Indebtedness; (k) any payment by Borrower or any other party to any Agent or any
Lender is held to constitute a preference under applicable bankruptcy or
insolvency law or if for any other reason any Agent or any Lender is required to
refund any payment or pay the amount thereof to someone else; (l) the settlement
or compromise of any of the Guaranteed Indebtedness; (m) the non-perfection of
any security interest or lien securing any or all of the Guaranteed
Indebtedness; (n) any impairment of any collateral securing any or all of the
Guaranteed Indebtedness; (o) the failure of any Agent or any Lender to sell any
collateral securing any or all of the Guaranteed Indebtedness in a commercially
reasonable manner or as otherwise required by law; (p) any change in the
corporate existence, structure, or ownership of Borrower; (q) any other
circumstance which might otherwise constitute a defense available to, or
discharge of, Borrower; (r) the unenforceability of all or any part of the
Guaranteed Indebtedness against Borrower by reason of the fact that the
Guaranteed Indebtedness exceeds the amount permitted by law; (s) the act of
creating all or any part of the Guaranteed Indebtedness is ultra xxxxx; or (t)
the officers creating all or any part of the Guaranteed Indebtedness acted in
excess of their authority.
8. Each Guarantor hereby represents and warrants to the Agents and the
Lenders the following:
(a) This Guaranty may reasonably be expected to benefit, directly
or indirectly, each Guarantor.
(b) Each Guarantor is familiar with, and has independently
reviewed the books and records regarding, the financial condition of
Borrower and is familiar with the value of any and all collateral
intended to be security for the payment of all or any part of the
Guaranteed Indebtedness. However, no Guarantor is relying on such
financial condition or collateral as an inducement to enter into this
Guaranty.
(c) Each Guarantor has adequate means to obtain from Borrower
on a continuing basis information concerning the financial condition of
Borrower, and no Guarantor is relying on the Agents or the Lenders to
provide such information to any Guarantor either now or in the future.
(d) Each Guarantor has the power and authority to execute,
deliver, and perform this Guaranty and any other agreements executed by
such Guarantor contemporaneously herewith, and the execution, delivery,
and performance of this Guaranty and any other agreements executed by
each Guarantor contemporaneously herewith do not and will not violate
(i) any agreement or instrument to which any Guarantor is a party, or
(ii) any law, rule, regulation, or order of any Governmental Authority
to which any Guarantor is subject.
(e) Neither the Agents, the Lenders, nor any other party has
made any representation, warranty, or statement to any Guarantor in
order to induce any Guarantor to execute this Guaranty.
(f) The financial statements and other financial information
regarding Guarantors heretofore and hereafter delivered to any Agent or
any Lender are and shall be true and correct in all material respects
and fairly present the financial position of Guarantors as of the dates
thereof, and no material adverse change has occurred in the financial
condition of any Guarantor as reflected in those financial disclosures.
(g) As of the date hereof, and after giving effect to this
Guaranty and the obligations evidenced hereby, (i) each Guarantor is
and will be Solvent (to the extent necessary, taking into account any
rights of contribution, reimbursement and subrogation), (ii) the fair
saleable value of each Guarantor's assets exceeds and will continue to
exceed its liabilities (both fixed and contingent), (iii) each
Guarantor is and will continue to be able to pay its debts as they
mature, and (iv) each Guarantor has and will continue to have
sufficient capital to carry on its business and all businesses in which
it is about to engage.
(h) All representations and warranties about each Guarantor made
in the Loan Agreement are true and correct.
9. Each Guarantor covenants and agrees that, as long as the Guaranteed
Indebtedness or any part thereof is outstanding or any Lender has any Commitment
under the Loan Agreement:
(a) No Guarantor shall, so long as its obligations under this
Guaranty continue, transfer or pledge any material portion of its
assets for less than full and adequate consideration.
(b) Each Guarantor shall promptly furnish to the
Administrative Agent at any time and from time to time such financial
statements and other financial information as the Administrative Agent
may require, in form and substance satisfactory to the Administrative
Agent.
(c) Each Guarantor shall comply with all terms and provisions
of the Loan Documents that apply to such Guarantor.
(d) Each Guarantor shall promptly inform the Administrative
Agent of (i) any litigation or governmental investigation against such
Guarantor or affecting any security for all or any part of the
Guaranteed Indebtedness or this Guaranty which, if determined
adversely, might have a material adverse effect upon the financial
condition of such Guarantor or upon such security or might cause a
default under any of the Loan Documents, (ii) any claim or controversy
which might become the subject of such litigation or governmental
investigation, and (iii) any material adverse change in the financial
condition of Guarantor.
10. (a) Each Guarantor hereby agrees that the Subordinated Indebtedness
(hereinafter defined) shall be subordinate and junior in right of payment to the
prior payment in full of all Guaranteed Indebtedness, and each Guarantor hereby
assigns the Subordinated Indebtedness to the Administrative Agent, for the
benefit of the Lenders, as security for the Guaranteed Indebtedness. If any sums
shall be paid to any Guarantor by Borrower or any other person or entity on
account of the Subordinated Indebtedness, such sums shall be held in trust by
such Guarantor for the benefit of the Administrative Agent and shall forthwith
be paid to the Administrative Agent without affecting the liability of any
Guarantor under this Guaranty and may be applied by the Administrative Agent and
the Lenders against the Guaranteed Indebtedness in such order and manner as the
Administrative Agent and the Lenders may determine in their sole discretion.
Upon the request of the Administrative Agent, each Guarantor shall execute,
deliver, and endorse to the Administrative Agent such documents and instruments
as the Administrative Agent may request to perfect, preserve, and enforce its
rights hereunder. For purposes of this Guaranty, the term "Subordinated
Indebtedness" means all indebtedness, liabilities, and obligations of Borrower
to any Guarantor, whether such indebtedness, liabilities, and obligations now
exist or are hereafter incurred or arise, or whether the obligations of Borrower
thereon are direct, indirect, contingent, primary, secondary, several, joint and
several, or otherwise, and irrespective of whether such indebtedness,
liabilities, or obligations are evidenced by a note, contract, open account, or
otherwise, and irrespective of the person or persons in whose favor such
indebtedness, obligations, or liabilities may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by any Guarantor.
(b) Each Guarantor agrees that any and all liens, security
interests, judgment liens, charges, or other encumbrances upon Borrower's assets
securing payment of any Subordinated Indebtedness shall be and remain inferior
and subordinate to any and all liens, security interests, judgment liens,
charges, or other encumbrances upon Borrower's assets securing payment of the
Guaranteed Indebtedness or any part thereof, regardless of whether such
encumbrances in favor of any Guarantor or the Administrative Agent presently
exist or are hereafter created or attached. Without the prior written consent of
the Lenders, no Guarantor shall (i) file suit against Borrower or exercise or
enforce any other creditor's right it may have against Borrower, or (ii)
foreclose, repossess, sequester, or otherwise take steps or institute any action
or proceedings judicial or otherwise, including without limitation the
commencement of, or joinder in, any liquidation, bankruptcy, rearrangement,
debtor's relief or insolvency proceeding) to enforce any liens, security
interests, collateral rights, judgments or other encumbrances held by any
Guarantor on assets of Borrower.
(c) In the event of any receivership, bankruptcy,
reorganization, rearrangement, debtor's relief, or other insolvency proceeding
involving Borrower as debtor, the Administrative Agent shall have the right to
prove and vote any claim under the Subordinated Indebtedness and to receive
directly from the receiver, trustee or other court custodian all dividends,
distributions, and payments made in respect of the Subordinated Indebtedness.
The Administrative Agent and the Lenders may apply any such dividends,
distributions, and payments against the Guaranteed Indebtedness in such order
and manner as the Administrative Agent and the Lenders may determine in their
sole discretion.
(d) Each Guarantor agrees that all promissory notes, accounts
receivable, ledgers, records, or any other evidence of Subordinated Indebtedness
shall contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Guaranty.
11. Each Guarantor waives (a) promptness, diligence, and notice of
acceptance of this Guaranty and notice of the incurring of any obligation,
indebtedness, or liability to which this Guaranty applies or may apply and
waives presentment for payment, notice of nonpayment, protest, demand, notice of
protest, notice of intent to accelerate, notice of acceleration, notice of
dishonor, diligence in enforcement, and indulgences of every kind, and (b) the
taking of any other action by the Administrative Agent, including without
limitation, giving any notice of default or any other notice to, or making any
demand on, Borrower, any other guarantor of all or any part of the Guaranteed
Indebtedness or any other party. To the maximum extent lawful, each Guarantor
waives all rights by which it might be entitled to require suit on an accrued
right of action in respect of any Guaranteed Indebtedness or require suit
against Borrower or others, whether arising under ss. 34.02 of the Texas
Business and Commerce Code, as amended (regarding its right to require
Administrative Agent or Lenders to xxx Borrower on accrued right of action
following its written notice to Administrative Agent or Lenders), ss. 17.001 of
the Texas Civil Practice and Remedies Code, as amended (allowing suit against it
without suit against Borrower, but precluding entry of judgment against it
before entry of judgment against Borrower), Rule 31 of the Texas Rules of Civil
Procedure, as amended (requiring Administrative Agent or Lenders to join
Borrower in any suit against it unless judgment has been previously entered
against Borrower), or otherwise.
12. In addition to any other waivers, agreements and covenants of
Guarantors set forth herein, each Guarantor hereby further waives and releases
all claims, causes of action, defenses and offsets for any act or omission of
the Administrative Agent, its directors, officers, employees, representatives or
agents in connection with the Administrative Agent's administration of the
Guaranteed Indebtedness, except for the Administrative Agent's willful
misconduct and gross negligence.
13. This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of all or any part of the Guaranteed
Indebtedness is rescinded or must otherwise be returned by any Agent or any
Lender upon the insolvency, bankruptcy, or reorganization of Borrower, any
Guarantor, any other guarantor of all or any part of the Guaranteed
Indebtedness, or otherwise, all as though such payment had not been made.
14. Any acknowledgment or new promise, whether by payment of principal
or interest or otherwise and whether by Borrower or others (including
Guarantors), with respect to any of the Guaranteed Indebtedness shall, if the
statute of limitations in favor of any Guarantor against the Administrative
Agent or any Lender 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.
15. This Guaranty is for the benefit of the Agents and the Lenders and
their respective successors and assigns, and in the event of an assignment of
the Guaranteed Indebtedness, or any part thereof, the rights and benefits
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty is binding not only on
Guarantors, but on each Guarantor's successors and assigns.
16. Each Guarantor recognizes that the Agents and the Lenders are
relying upon this Guaranty and the undertakings of each Guarantor hereunder in
making extensions of credit to Borrower under the Loan Agreement and further
recognizes that the execution and delivery of this Guaranty is a material
inducement to the Agents and the Lenders in entering into the Loan Agreement.
Each Guarantor hereby acknowledges that there are no conditions to the full
effectiveness of this Guaranty.
17. This Guaranty is a Loan Document and, therefore, this Guaranty is
subject to the applicable provisions of the Loan Agreement, all of which
applicable provisions are incorporated herein by reference the same as if set
forth herein verbatim. Moreover, each Guarantor acknowledges and agrees that
this Guaranty is subject to the offset provisions in favor of the Lenders in the
Loan Agreement.
18. Each Guarantor expressly assumes all responsibilities to remain
informed of the financial condition of Borrower and any circumstances affecting
(a) Borrower's ability to perform under the Loan Agreement and the other Loan
Documents to which it is a party or (b) any collateral securing all or any part
of the Guaranteed Indebtedness.
19. In the event that any Guarantor is entitled to receive any notice
under the Uniform Commercial Code, as it exists in the state governing any such
notice, of the sale or other disposition of any collateral securing all or any
part of the Guaranteed Indebtedness or this Guaranty, reasonable notice shall be
deemed given when such notice is deposited in the United States mail, postage
prepaid, at the address for Guarantor set forth on the signature page of this
Guaranty, five days prior to the date any public sale, or after which any
private sale, of any such collateral is to be held; provided, however, that
notice given in any other reasonable manner or at any other reasonable time
shall be sufficient.
20. No delay on the part of the Administrative Agent in exercising any
right hereunder or failure to exercise the same shall operate as a waiver of
such right. In no event shall any waiver of the provisions of this Guaranty be
effective unless the same be in writing and signed by the appropriate parties in
accordance with the Loan Agreement, and then only in the specific instance and
for the purpose given.
21. Nothing contained herein shall be construed as an obligation on the
part of the Agents or the Lenders to extend or continue to extend credit to
Borrower.
22. Notwithstanding any other provision of this Guaranty or of any
instrument or agreement evidencing, governing or securing all or any part of the
Guaranteed Indebtedness, each Guarantor and the Administrative Agent by its
acceptance hereof agree that no Guarantor shall ever be required or obligated to
pay interest in excess of the maximum nonusurious interest rate as may be
authorized by applicable law for the written contracts which constitute the
Guaranteed Indebtedness. It is the intention of Guarantors, the Agents, and the
Lenders to conform strictly to the applicable laws which limit interest rates,
and any of the aforesaid contracts for interest, if and to the extent payable by
Guarantors, shall be held to be subject to reduction to the maximum nonusurious
interest rate allowed under said law.
23. THIS GUARANTY IS EXECUTED AND DELIVERED AS AN INCIDENT TO A LENDING
TRANSACTION CONSUMMATED AND PERFORMABLE IN XXXXXX COUNTY, TEXAS, AND SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
24. Each Guarantor shall pay on demand all reasonable attorneys' fees
and all other costs and expenses incurred by the Agents or any Lender in
connection with the enforcement or collection of this Guaranty.
25. Guarantors (other than Prime RVC, Inc., which has not previously
executed any guaranty of the Guaranteed Indebtedness) acknowledge that this
Guaranty has been given in amendment, renewal, restatement and confirmation of
Guarantor's obligations, covenants, and agreements contained in the Guaranty
Agreements previously executed by certain Guarantors in favor of Administrative
Agent and the Lenders, including, without limitation, those dated August 17,
1995, April 26, 1996, March 31, 1997, and April 20, 1998 (the "Previous
Guaranties"). Guarantors further confirm and agree that neither the execution of
the Loan Agreement or any other Loan Document, nor the consummation of the
transactions described therein, shall in any way affect the liability of certain
Guarantors under the Previous Guaranties, and the obligations evidenced by the
Previous Guaranties continue in full force and effect as modified, amended and
restated by the terms contained herein.
26. THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF GUARANTORS,
THE AGENTS AND THE LENDERS WITH RESPECT TO GUARANTORS' GUARANTY OF THE
GUARANTEED INDEBTEDNESS AND RESTATES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY GUARANTORS, THE AGENTS AND
THE LENDERS AS A FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND
NO COURSE OF DEALING BETWEEN ANY GUARANTOR, THE AGENTS OR THE LENDERS, NO COURSE
OF PERFORMANCE, NO TRADE PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY
NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS
GUARANTY. THERE ARE NO ORAL AGREEMENTS AMONG GUARANTORS, THE AGENTS AND THE
LENDERS.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES FOLLOW.]
EXECUTED as of the 31st day of January, 2000.
GUARANTORS:
----------
PROSTATHERAPIES, INC.,
a Delaware corporation
LITHOTRIPTORS, INC.,
a North Carolina corporation
FASTSTART, INC.,
a North Carolina corporation
NATIONAL LITHOTRIPTORS ASSOCIATION,
a North Carolina corporation
R.R. LITHO, INC.,
a Delaware corporation
OHIO LITHO, INC.,
a Delaware corporation
MEDTECH INVESTMENT, INC.,
a North Carolina corporation
PRIME MEDICAL OPERATING, INC.,
a Delaware corporation
PRIME MANAGEMENT, INC.,
a Nevada corporation
PRIME LITHOTRIPTER OPERATIONS, INC.,
a New York corporation
PRIME DIAGNOSTIC SERVICES, INC.,
a Delaware corporation
PRIME LITHOTRIPSY SERVICES, INC.,
a New York corporation
PRIME DIAGNOSTIC CORP. OF FLORIDA,
a Delaware corporation
SUN MEDICAL TECHNOLOGIES, INC.,
a California corporation
PRIME PRACTICE MANAGEMENT, INC.,
a New York corporation
PRIME CARDIAC REHABILITATION SERVICES,
INC., a Delaware corporation
ALABAMA RENAL STONE INSTITUTE, INC.,
an Alabama corporation
PRIME KIDNEY STONE TREATMENT, INC.,
a New Jersey corporation
SUN ACQUISITION, INC.,
a California corporation
EXECUTIVE MEDICAL ENTERPRISES, INC.,
a Delaware corporation
PRIME RVC, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Treasurer
PRIME MEDICAL MANAGEMENT, L.P.,
a Delaware limited partnership
By: Prime Medical Operating, Inc.,
a Delaware corporation, its
General Partner
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Treasurer
Address for Notices:
0000 Xxxxxxx xx Xxxxx Xxxxxxx
Xxxxx X-000
Xxxxxx, Xxxxx 00000
Attn: President
Fax Number: (000) 000-0000
Telephone Number: (000) 000-0000
