GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT is made this 13th day of June, 1997 by BLUE CROSS
AND BLUE SHIELD OF NEW JERSEY, INC., a New Jersey health service corporation
(the "Guarantor") in favor of SUMMIT BANK, a banking corporation of the State of
New Jersey (the "Bank").
W I T N E S S E T H:
WHEREAS, the Guarantor presently owns approximately 50% of the issued and
outstanding shares of capital stock of CAREADVANTAGE, INC. (the "Borrower"); and
WHEREAS, concurrently herewith, the Bank is entering into a Credit
Agreement (the "Credit Agreement") with the Borrower and the Guarantor pursuant
to which the Bank has agreed to extend credit and make loans to the Borrower, as
more fully set forth therein; and
WHEREAS, the execution and delivery of this Agreement by the Guarantor is a
condition precedent to the Bank making the Loans described in the Credit
Agreement.
NOW, THEREFORE, in order to induce the Bank to make the Loan as aforesaid,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Guarantor does hereby agree for the benefit
of the Bank as follows:
ARTICLE I
1.1 Definitions. Terms used herein and not otherwise defined shall have the
meanings ascribed to them in the Credit Agreement.
1.2 Guaranty. The Guarantor hereby irrevocably and unconditionally
guarantees to the Bank the prompt, punctual, and full payment when due (whether
at stated maturity, by acceleration or otherwise) of all of the Borrower's
obligations under the Notes and the Loan Documents, including, without
limitation, all principal, interest (including post-petition interest in the
event the Borrower files or has filed against it a petition in bankruptcy) and
all other amounts payable under the Notes and the Loan Documents, as the same
may be modified, extended or replaced (collectively, the "Obligations").
1.3 Guaranty Unconditional. The obligations of the Guarantor hereunder are
irrevocable, absolute, and unconditional, irrespective of the value,
genuineness, validity, regularity, or enforceability of any Loan Document or any
term or provision thereof or of any other document relating to the Obligations
or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor.
1.4 Consent. The Guarantor hereby consents that any or all of the following
actions may be taken or things done without notice to the Guarantor and without
affecting the liability of the Guarantor under this Agreement or any of the Loan
Documents:
(a) The time for performance of or compliance with any of the Obligations
may be accelerated or extended or such performance or compliance may be waived
by the Bank (including, without limitation, the renewal, extension,
acceleration, or other change in time of payment, or other terms of, the
Obligations such as an increase or decrease in the rate of interest thereon);
(b) Any of the acts referred to in the Loan Documents and the other
documents executed and delivered in connection therewith may be performed,
including without limitation, the making of any Advance or Term Advance which
may be made thereunder from time to time;
(c) The terms of any of the Obligations or any term or condition in any
Loan Document may be amended by the parties thereto and the Bank for the purpose
of adding any provisions thereto or changing in any manner the rights of the
Bank or of such parties thereunder;
(d) Any collateral which has been granted, is herein granted or may
hereafter be granted by the Borrower or any party to the Bank to secure all or
any part of the Obligations, including without limitation, the collateral
described in the Loan Documents (collectively, the "Bank Collateral") may be
exchanged, surrendered, or otherwise dealt with, and the Bank's interest
thereunder may be released and may or may not be perfected, all as the Bank in
its sole discretion may determine;
(e) The Bank may apply any of the aforesaid Bank Collateral to the
Obligations and direct the order or manner of sale thereof, including, without
limitation, a nonjudicial sale, as the Bank may in its sole discretion determine
(in accordance with the terms and conditions of the relevant Loan Documents with
respect thereto), all without affecting the liability of the Guarantor
hereunder; and
(f) The Bank may take any action or permit or waive any action or inaction
on the part of any party with respect to the Obligations and any Bank Collateral
or other security granted in connection therewith, all without affecting the
liability of the Guarantor hereunder.
1.5 The Bank Collateral. The Guarantor acknowledges that its obligations
hereunder will not be affected by (i) the
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Bank's failure to properly create a lien on or security interest in the Bank
Collateral, (ii) the Bank's failure to create or maintain a priority with
respect to the lien on, or security interest purported to be created in, the
Bank Collateral or (iii) any act or omission of the Bank (whether negligent or
otherwise) which adversely affects the Bank's purported security interest in the
Bank Collateral or lien thereon or the priority of such security interest or
lien.
1.6 Tolling of Statute of Limitations. The Guarantor agrees that any
payment of any of the Obligations or other acts which shall toll any statute of
limitations applicable to the Obligations shall also toll the statute of
limitations applicable to the Guarantor's liability hereunder.
1.7 Waiver. The Guarantor hereby expressly waives diligence, presentment,
demand for payment, protest, the benefit of any statute of limitations affecting
the Borrower's liability under any Loan Document or the enforcement of this
Agreement, the benefit of any act or omission by the Bank which directly or
indirectly results in or aids the discharge of the Borrower or any of the
Obligations by operation of law or otherwise, all notices whatsoever, including,
without limitation, notice of acceptance of this Agreement, the incurring of the
Obligations or notice of any default or Event of Default under the Loan
Documents, and any requirement that the Bank exhaust or enforce any right, power
or remedy or proceed against the Borrower, the Bank Collateral or any other
security for, or any other guarantor of, or any other party liable for, any of
the Obligations. The Guarantor specifically agrees that it will not be necessary
or required, and the Guarantor shall not be entitled to require, that the Bank
file suit or proceed to assert or obtain a claim for personal judgment against
the Borrower for the Obligations or to make any effort at collection or
enforcement of the Obligations from the Borrower or foreclosure against or seek
to realize upon the Bank Collateral or any other security now or hereafter
existing for the Obligations or this Agreement or file suit or proceed to obtain
or assert a claim for the Obligations or make any effort at collection of the
Obligations from any such party or exercise or assert any other right or remedy
to which the Bank is or may be entitled in connection with the Obligations or
any security or guarantee relating thereto or assert or file any claims against
the assets of the Borrower or other person liable for the Obligations, or any
part thereof, before or as a condition of enforcing the liability of the
Guarantor hereunder. The Guarantor expressly waives any requirement of
marshalling of assets.
1.8 Certain Rights. The Bank may pursue its rights and remedies under this
Agreement and shall be entitled to payment hereunder notwithstanding (i) any
other guarantee by any other party of all or any part of the Obligations, (ii)
any action taken
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by the Bank to enforce any of its rights or remedies under such other guarantee
or any security agreement, mortgage or deed of trust, or (iii) any payment
received under such other guarantee or any security agreement, mortgage or deed
of trust (except as to the amount of such payment). In pursuing its rights under
this Agreement or any Loan Document, the Bank need not join the Guarantor in any
suit against the Borrower or join the Borrower or other guarantors in any suit
against the Guarantor. The Guarantor waives any right to require the Bank to
give notice of terms, time, and place of any public or private sale of any Bank
Collateral or any other security granted in connection with the Obligations or
to comply with any other provisions of Section 9-504 of the Uniform Commercial
Code.
1.9 Continuing Guaranty. This Agreement shall be a continuing guaranty and
any other guarantor or guarantors of all or a portion of the Obligations may be
released without affecting the liability of the Guarantor hereunder.
1.10 No Subrogation. Until the Obligations have been satisfied and paid in
full and the Bank has no further obligation to make any Advance, the Guarantor
hereby irrevocably and unconditionally waives (a) all rights of subrogation,
reimbursement, contribution, indemnification, setoff or other recourse in
respect of sums paid or payable by the Guarantor hereunder, (b) all statutory,
contractual, common law, equitable and other claims against the Borrower and/or
its assets or any other guarantor and (c) all other benefits which the Guarantor
might otherwise directly or indirectly receive or be entitled to by reason of
any amounts paid by or collected or due from (i) the Guarantor hereunder, (ii)
the Borrower, or (iii) any other guarantor, including, but not limited to, any
rights which the Guarantor may have by reason of any rights, powers, or remedies
of the Borrower in connection with any anti-deficiency or similar laws limiting
or qualifying the Obligations.
1.11 Reinstatement. The liability of the Guarantor hereunder shall be
reinstated and revived and the rights of the Bank shall continue if and to the
extent that for any reason any payment by or on behalf of the Borrower is
rescinded or must be otherwise restored by the Bank, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, all as though such
amount had not been paid.
1.12 Compromise and Settlement. No compromise, settlement, release,
renewal, extension, indulgence, change in, waiver, or modification of any of the
Obligations or the release or discharge of the Borrower from the performance of
any of the Obligations shall release or discharge the Guarantor from this
Agreement.
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1.13 Insolvency. The voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all the assets and
liabilities, or receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, or other proceeding affecting the Borrower or the
disaffirmance of any Loan Document in any such proceeding shall not release or
discharge the Guarantor from this Agreement.
1.14 Further Payments. The Guarantor further agrees to pay forthwith, upon
demand, all costs and expenses (including reasonable attorneys' fees) incurred
or expended by the Bank in connection with the enforcement of this Agreement.
1.15 Financial Condition. The Guarantor acknowledges and agrees that (i) it
is aware of, and has reviewed and analyzed, the present and projected financial
condition of the Borrower, (ii) it has not relied upon any information,
representation or warranty of the Bank regarding the financial condition of the
Borrower, (iii) the Bank has no obligation to provide the Guarantor with any
financial information or other information of any kind regarding the Borrower or
any matter under the Loan Documents, including without limitation, any notice of
any kind thereunder, (iv) it has made its own due diligence investigation of the
Borrower and its financial condition and (v) it hereby waives and shall not be
entitled to assert as a defense or counterclaim any matter, claim or cause of
action regarding or arising from the present or future financial condition of
the Borrower.
ARTICLE II
2.1 Representations and Warranties. The Guarantor represents and warrants
to the Bank as follows:
(a) The Guarantor (i) is presently (but not as of any date hereafter) the
record and beneficial owner of approximately 50% of the issued and outstanding
capital stock of the Borrower and (ii) will derive economic and financial
benefit from the making of the Loans.
(b) The Guarantor has full power and authority to execute, deliver and
perform any action which may be necessary or advisable to carry out the terms of
this Agreement; and this Agreement has been duly executed and delivered by the
Guarantor and is the legal, valid and binding obligation of the Guarantor
enforceable in accordance with its terms.
(c) The execution, delivery and performance of this Agreement will not (1)
violate any provision of any existing law, statute, rule, regulation or
ordinance, (2) conflict with, result in a breach of or constitute a default
under (a) the certificate of incorporation or by-laws of the Guarantor or (b)
any order,
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judgment, award or decree of any court, governmental authority, bureau or
agency, or (c) any mortgage, lease, contract or other agreement or undertaking
to which the Guarantor is a party or by which the Guarantor or any of its
properties or assets may be bound, and (3) result in the creation or imposition
of any lien upon or with respect to any property or asset now or hereafter
acquired by the Guarantor other than the liens created by the Loan Documents.
(d) No consent, license, permit, approval or authorization of, exemption
by, notice to, report to, or registration, filing or declaration with any person
is required in connection with the execution, delivery, performance or validity
of this Agreement or the transactions contemplated hereby.
ARTICLE III
3. Remedies. Upon the occurrence of an Event of Default or in the event
that any portion of the Obligations shall have been declared due and payable
(whether at the stated maturity, by acceleration or otherwise), the Bank may, in
addition to all other rights and remedies as may be available at law or in
equity or under the terms of any of the Loan Documents and without demand of
performance or other demand, advertisement or notice of any kind, immediately
set off any or all of the Obligations against any property of the Guarantor
which may now or hereafter be in the Bank's possession or control, and such
right of setoff shall be deemed to have been exercised immediately upon the
occurrence of such Event of Default even though such setoff is not noted on the
records of the Bank until a later time. The Guarantor shall be liable for the
deficiency if the proceeds of any sale or other disposition of any Bank
Collateral are insufficient to pay all amounts to which the Bank is entitled
hereunder, including the fees of any attorneys employed by the Bank to collect
such deficiency.
ARTICLE IV
4.1 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Bank, any right, power or privilege hereunder,
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law.
4.2 Amendment. No modification, amendment or waiver of any provision of
this Agreement shall be effective unless the same shall be in writing and signed
by the Bank and then any such waiver or consent shall be effective only in the
specific instance and for
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the purpose for which given.
4.3 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto, all future holders of the Obligations and
their respective successors and assigns.
4.4 Severability. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
4.5 No Third Party Rights. This Agreement is solely for the benefit of the
Bank and its successors and assigns, and no other person shall have any right,
benefit, priority or interest in, under or because of the existence of, this
Agreement.
4.6 Notice. All notices and other communications given to or made upon any
party hereto in connection herewith shall be in writing and mailed (by certified
or registered United States mail, postage prepaid) or delivered by overnight
courier or hand delivery to the respective parties hereto in accordance with the
provisions of the Credit Agreement. Any notice to the Borrower shall constitute
sufficient notice to the Guarantor hereunder.
4.7 Acknowledgment by Guarantor. The Guarantor acknowledges that:
(i) it has been represented by counsel in the negotiation, execution
and delivery of this Guaranty and the other documents executed and
delivered to the Bank in connection herewith;
(ii) the Bank has no fiduciary relationship with or duty to the
Guarantor arising out of or in connection with the Notes or the
indebtedness evidenced thereby and the relationship between the Guarantor
and the Bank is solely that of debtor and creditor; and
(iii) no joint venture is created hereby or otherwise exists by virtue
of the transactions contemplated hereby between the Bank and the Guarantor.
4.8 Waiver of Jury Trial. THE GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS GUARANTY OR ANY OTHER DOCUMENT OR INSTRUMENT EXECUTED IN CONNECTION WITH
THE INDEBTEDNESS EVIDENCED HEREBY AND FOR ANY COUNTERCLAIM THEREIN.
4.9 Governing Law. THIS GUARANTY AND THE RIGHTS AND
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OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW JERSEY.
IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this
Agreement as of the day and year first above written.
ATTEST: BLUE CROSS AND BLUE SHIELD
OF NEW JERSEY, INC.
By:____________________________ By:_____________________________
Name: Name:
Title: Title:
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