EXHIBIT 99.5
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UNCONDITIONAL GUARANTY
THIS UNCONDITIONAL GUARANTY ("Guaranty") is executed as of the
____ day of February, 2001, by ABLE LABORATORIES, INC. ("Guarantor"), a Delaware
corporation, in favor of ARGOSY INVESTMENT PARTNERS, L.P. ("Argosy"), a
Pennsylvania limited partnership formerly known as Odyssey Investment Partners,
L.P., and FINOVA MEZZANINE CAPITAL INC. ("FINOVA"), a Tennessee corporation
formerly known as SIRROM Capital Corporation, in its individual capacity and as
Collateral Agent for FINOVA and Argosy (in this capacity, "Agent"; Argosy and
FINOVA are sometimes referred to collectively as "Lender").
RECITALS:
WHEREAS, DynaGen, Inc. ("Borrower"), a Delaware corporation,
is obligated to FINOVA and to Argosy, as described in that Credit Agreement
dated as of the date hereof among Borrower, FINOVA and Argosy; and
WHEREAS, As a wholly-owned subsidiary of Borrower, Guarantor
shall receive valuable consideration and reasonably equivalent value for the
execution hereof as an inducement to cause FINOVA and Argosy to enter into the
Credit Agreement and permit the related transactions described therein;
NOW, THEREFORE, as an inducement to cause FINOVA and Argosy to
enter into the Credit Agreement, and for other valuable consideration, the
receipt and sufficiency of which are acknowledged, it is agreed as follows:
1. Definition of Guaranteed Obligations. As used in this
Guaranty, the "Guaranteed Obligations" shall mean the "Obligations," as defined
in the Credit Agreement and all modifications, extensions and renewals thereof.
2. Guaranty of Payment. Guarantor hereby guarantees to Lender
the timely payment and performance of the Guaranteed Obligations, without
setoff. Guarantor hereby agrees that if the Guaranteed Obligations are not
timely paid and/or performed, as the case may be, in accordance with the terms
thereof, Guarantor will immediately pay and/or perform such Guaranteed
Obligations.
3. Guaranty Unconditional. Guarantor's guarantee of the
Guaranteed Obligations is absolute and unconditional. The validity of this
Guaranty shall not be impaired by any event whatsoever, including, but not
limited to, the merger, consolidation, dissolution, cessation of business or
liquidation of Borrower; the financial decline or bankruptcy of Borrower; the
failure of any other party to guarantee the Guaranteed Obligations or to provide
collateral therefor; Lender's compromise or settlement with or without release
of any other party liable for the Guaranteed Obligations; Lender's release of
any collateral for the Guaranteed Obligations; Lender's failure to file suit
against Borrower (regardless of whether Borrower is becoming insolvent, is
believed to be about to leave the state or any other circumstance); Lender's
failure to give Guarantor notice of default by Borrower; the unenforceability of
the Guaranteed Obligations against Borrower, due to bankruptcy discharge,
counterclaim or otherwise; Lender's acceleration of the Guaranteed Obligations
at any time; the extension, modification or renewal of the Guaranteed
Obligations; Lender's failure to exercise diligence in collection; the
termination of any relationship of Guarantor with Borrower, including, but not
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limited to, any relationship of employment, ownership or commerce; Borrower's
change of name or use of any name other than the name used to identify Borrower
in this Guaranty; or Borrower's use of the credit extended for any purpose
whatsoever. Guarantor agrees that this Guaranty shall be valid and binding upon
Guarantor upon the delivery of this executed Guaranty to Lender by any party
whomsoever.
4. Guaranty Irrevocable. Guarantor's guarantee of the
Guaranteed Obligations is irrevocable.
5. Primary Liability of Guarantor. This Guaranty constitutes a
guarantee of payment and performance and not of collection. Accordingly, Lender
may enforce this Guaranty against Guarantor without first making demand upon or
instituting collection proceedings against Borrower. Guarantor's liability for
the Guaranteed Obligations is hereby declared to be primary, and not secondary,
and Guarantor may be called upon hereunder to make any payment when due under
the Guaranteed Obligations irrespective of the existence of any default
thereunder.
6. Bankruptcy of Borrower. If proceedings are instituted by
Borrower under any state insolvency law or under any federal bankruptcy law, or
if such proceedings are instituted against Borrower, Lender may, at its option,
without notice, notwithstanding any limitation on Lender's ability to use such
proceedings as the basis of a default against Borrower, declare all the
Guaranteed Obligations presently due and payable by Guarantor.
7. No Marshalling of Assets. Lender may proceed against any
collateral securing the Guaranteed Obligations and against parties liable
therefor in such order as it may elect, and Guarantor shall not be entitled to
require Lender to xxxxxxxx assets. The benefit of any rule of law or equity to
the contrary is hereby expressly waived.
8. Impairment of Collateral; Release of Liable Parties. Lender
may, in its sole discretion and with or without consideration, release any
collateral securing the Guaranteed Obligations or release any party liable
therefor. The defenses of impairment of collateral and impairment of recourse
and any requirement of diligence on Lender's part in collecting the Guaranteed
Obligations are hereby waived.
9. Amendment of Guaranteed Obligations. Lender may, without
notice to or the joinder of Guarantor and without affecting Guarantor's
liability hereunder, modify, extend, accelerate, reinstate, refinance, or renew
the Guaranteed Obligations (with or without the execution of new Promissory
Notes) and grant any consent or indulgence with respect thereto.
10. Waivers of Notice. Guarantor hereby waives any requirement
of presentment, protest, notice of dishonor, notice of default, demand, and all
other actions or notices that may be required on Lender's part in connection
with the Guaranteed Obligations.
11. Subordination. Guarantor agrees that any existing or
future loan made by Guarantor to Borrower and any other existing or future
obligation of Borrower to Guarantor shall be subordinate to the Guaranteed
Obligations as to both payment and collection. Accordingly, Guarantor agrees not
to accept any payment whatsoever from Borrower or to allow any payment by
Borrower on Guarantor's behalf until this Guaranty has been terminated in full;
provided, however, intercompany advances and the repayment thereof may continue
between Borrower
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and Guarantor in the ordinary course of business in the absence of an Event of
Default under the Credit Agreement.
12. Deferral of Subrogation of Guarantor. Guarantor shall not
be subrogated to any rights of Lender against Borrower or be entitled to any
reimbursement or payment from Borrower until the Guaranteed Obligations have
been paid in full.
13. Application of Funds. Lender may apply payments received
for Borrower's account first to pay any indebtedness of Borrower that is not
guaranteed by Guarantor, if any, before reducing the Guaranteed Obligations.
14. Statute of Limitations. Guarantor acknowledges that the
statute of limitation applicable to this Guaranty shall begin to run only upon
Lender's accrual of a cause of action against Guarantor hereunder caused by
Guarantor's refusal to honor a demand for performance hereunder made by Lender
in writing; provided, however, if, subsequent to the demand upon Guarantor,
Lender reaches an agreement with Borrower on any terms causing Lender to forbear
in the enforcement of its demand upon Guarantor, the statute of limitation shall
be reinstated for its full duration until Lender subsequently again makes demand
upon Guarantor.
15. Cancellation by Lender. Lender may evidence its
cancellation of this Guaranty and the release of Guarantor from liability
hereunder by delivering to Guarantor an instrument of release, or by delivering
this Guaranty to Guarantor, or both. Unless Lender delivers this original
Guaranty to Guarantor with a notation on its face signed and dated by an
authorized officer of Lender stating "Cancelled in Full As To All Guaranteed
Obligations," however, the purported cancellation hereof and release of
Guarantor shall not impair Guarantor's continuing liability for (i) any amount
of principal, interest, or expenses that was mistakenly omitted by Lender in
calculating the final payment due under the Guaranteed Obligations, if the
release of Guarantor was based upon Lender's belief that it had been paid in
full; (ii) any surviving liability of Borrower to reimburse Lender for expenses
or to indemnify Lender provided for in any document executed prior to the
purported cancellation hereof evidencing or securing the Guaranteed Obligations;
and (iii) liability for avoided payments and expenses related thereto (as
provided in detail below). Lender shall not be obligated to release any
collateral securing this Guaranty until after all applicable time periods have
expired regarding bankruptcy preference or other avoidance actions that may be
applicable to the circumstances of payment of any or all of the Guaranteed
Obligations.
16. Recovery of Avoided Payments. If any amount applied by
Lender to the Guaranteed Obligations is subsequently challenged by a bankruptcy
trustee or debtor-in-possession as an avoidable transfer on the grounds that the
payment constituted a preferential payment or a fraudulent conveyance under
state law or the Bankruptcy Code or any successor statute thereto or on any
other grounds, Lender may, at its option and in its sole discretion, elect
whether to contest such challenge. If Lender contests the avoidance action, all
costs of the proceeding, including Lender's attorneys fees, will become part of
the Guaranteed Obligations. If the contested amount is successfully avoided, the
avoided amount will become part of the Guaranteed Obligations hereunder. If
Lender elects not to contest the avoidance action, Lender may tender the amount
subject to the avoidance action to the bankruptcy court, trustee or
debtor-in-possession and the amount so advanced shall become part of the
Guaranteed Obligations hereunder. Guarantor's obligation to reimburse Lender for
amounts due under this paragraph shall survive the purported cancellation hereof
except as otherwise provided above.
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17. Solvency of Guarantor. Guarantor warrants to Lender that
Guarantor is not insolvent and that Guarantor's execution hereof does not render
Guarantor insolvent. The amount of this Guaranty shall be limited to the maximum
possible amount for which Guarantor may be liable for the Guaranteed Obligations
without avoidance under any applicable law.
18. Security Interest; Setoff. In order to further secure the
payment of the Guaranteed Obligations, Guarantor hereby grants to Lender a
security interest and right of setoff against all of Guarantor's presently owned
or hereafter acquired monies, items, credits, deposits and instruments
(including certificates of deposit) presently or hereafter in the possession of
Lender. By maintaining any such accounts or other property at Lender, Guarantor
acknowledges that Guarantor voluntarily subjects the property to Lender's rights
hereunder.
19. Recitals. Guarantor warrants and agrees that the recitals
set forth at the beginning of this Guaranty are true.
20. No Burdensome Agreements. Guarantor warrants that the
execution and performance of this Guaranty will not cause a default under any
other contract or agreement to which Guarantor or any property of Guarantor is
subject.
21. Legal and Binding Agreement. Guarantor warrants that the
execution and performance of this Guaranty will not violate any judicial or
administrative order or governmental law or regulation, and that this Guaranty
is valid and binding in every respect according to its terms.
22. No Consent Required. Guarantor warrants that Guarantor's
execution and performance of this Guaranty do not require the consent of or the
giving of notice to any third party including, but not limited to, any other
lender, governmental body or regulatory authority.
23. Consent to Jurisdiction and Venue. Guarantor hereby
irrevocably consents to the jurisdiction of the United States District Court for
the Middle District of Tennessee and of all Tennessee state courts sitting in
Davidson County, Tennessee, for the purpose of any litigation to which Lender
may be a party and which concerns this Guaranty or the Guaranteed Obligations.
It is further agreed that venue for any such action shall lie exclusively with
courts sitting in Davidson County, Tennessee, unless Lender agrees to the
contrary in writing.
24. Not Partners; No Third Party Beneficiaries. Nothing
contained herein or in any related document shall be deemed to render Lender a
partner of Borrower or Guarantor for any purpose. This Guaranty and any
documents securing the Guaranteed Obligations has been executed for the sole
benefit of Lender as an inducement to cause it to extend credit to Borrower, and
neither Guarantor nor any other third party is authorized to rely upon Lender's
rights hereunder or to rely upon an assumption that Lender has or will exercise
its rights under any document.
25. Costs of Collection Against Guarantor. Guarantor agrees to
pay all costs of collection, including, without limitation, court costs,
attorney's fees and compensation for time spent by Lender's employees, that
Lender may incur in enforcing the terms of this Guaranty against Guarantor.
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26. Notices. Any communications concerning this Guaranty or
the credit described herein shall be addressed as provided in the Loan
Agreement.
27. Indulgence Not Waiver. Lender's indulgence in the
existence of a default under the Guaranteed Obligations or any departure from
the terms of this Guaranty or any other document shall not prejudice Lender's
rights to make demand and recover from Guarantor in accordance with this
Guaranty.
28. Cumulative Remedies. The remedies provided Lender in this
Guaranty are not exclusive of any other remedies that may be available to Lender
under any other document or at law or equity.
29. Amendment and Waiver in Writing. No provision of this
Guaranty can be amended or waived, except by a statement in writing signed by
the party against which enforcement of the amendment or waiver is sought.
30. Assignment. This guaranty shall be binding upon heirs,
successors and assigns of Guarantor and Lender, except that Guarantor shall not
assign any rights or delegate any obligations arising hereunder without the
prior written consent of Lender. Any attempted assignment or delegation by
Guarantor without the required prior consent shall be void.
31. Severability. Should any provision of this Guaranty be
invalid or unenforceable for any reason, the remaining provisions hereof shall
remain in full effect.
32. Applicable Law. The validity, construction and enforcement
of this Guaranty and all other documents executed with respect to the Guaranteed
Obligations shall be determined according to the laws of Tennessee, in which
state this Guaranty has been executed and delivered.
33. Gender and Number. Words used herein indicating gender or
number shall be read as context may require.
34. Captions Not Controlling. Captions and headings have been
included in this Guaranty for the convenience of the parties, and shall not be
construed as affecting the content of the respective paragraphs.
35. Entire Agreement; No Oral Representations Limiting
Enforcement. This Guaranty represents the entire agreement between the parties
concerning the liability of Guarantor for the Guaranteed Obligations, and any
oral statements regarding Guarantor's liability for the Guaranteed Obligations
are merged herein. Without limiting the foregoing, Guarantor acknowledges
Lender's intention to enforce this Guaranty to the fullest extent possible and
Guarantor acknowledges that Lender has made no oral statements to Guarantor that
could be construed as a waiver of Lender's right to enforce this Guaranty by all
available legal means.
36. Agent. The rights and remedies of FINOVA and Argosy
hereunder may be enforced only by FINOVA in its capacity as Agent pursuant to
that Collateral Agent Agreement between them dated as of June 18, 1997.
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37. Waiver of Jury Trial. Guarantor and, by their acceptance
hereof, FINOVA and Argosy, hereby knowingly, voluntarily and with benefit of
counsel waive any right to trial by jury in any dispute arising from or related
to this Guaranty or the Guaranteed Obligations, with the result that all matters
of fact and law in any such dispute will be tried by a judge sitting without a
jury.
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Executed as of the date first written above.
THE UNDERSIGNED
ACKNOWLEDGES A THOROUGH
UNDERSTANDING OF THE TERMS
OF THIS GUARANTY AND AGREES
TO BE BOUND THEREBY:
ABLE LABORATORIES, INC.
By:
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Name:
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Title:
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[Signature Page to Unconditional Guaranty]
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