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Exhibit No. 10-7
EXHIBIT C
GUARANTY AGREEMENT
This Guaranty Agreement (this "Guaranty") is made and entered into as
of the 31st day of December, 1998, by Integrated Health Options, LLC, a
Michigan limited liability company ("IHO"), BHG, Inc., a Michigan corporation
and Illiana Behavioral Management, Inc., a Michigan corporation (collectively
the "Guarantors"), for the benefit of MHM Extended Care Services, Inc., a
Delaware corporation ("ECS").
BHG of Pennsylvania, LLC, a Pennsylvania limited liability company
("BHG"), of which IHO is the sole member and manager, and ECS are entering into
an Asset Acquisition Agreement, dated December 22, 1998 (the "Acquisition
Agreement") and pursuant to which BHG will purchase the Acquired Assets of ECS,
and a Management Agreement dated the same date (the "Management Agreement")
pursuant to which BHG will provide management services to ECS in connection
with the Operations between the Closing and the Effective Date upon the terms
and conditions set forth therein. Except as otherwise indicated, capitalized
terms used herein are defined as set forth in the Acquisition Agreement and the
Management Agreement (collectively, the "Agreements").
The Guarantors are executing and delivering this Guaranty as an
inducement to ECS to enter into the Agreements.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Guarantors hereby agree as follows:
1. Guarantor's Guarantee. The Guarantors hereby guarantee the
full and punctual performance and discharge, when due, without demand therefor,
of the Obligations (as defined in SECTION 3 below) of BHG under the Agreements.
This Guaranty is secured by a pledge of certain collateral by IHO pursuant to a
Security Agreement dated the date hereof and agreed to between IHO and ECS.
2. Absolute and Continuing Guaranty. The Guaranty shall be an
irrevocable, absolute and continuing guaranty. The obligations of the
Guarantors hereunder are direct, primary and independent of the obligations of
BHG and a separate claim or demand under the Agreements may be asserted against
and sought to be collected from Guarantors, whether claim or demand is asserted
against BHG or whether BHG is joined in any such claim(s) or demand(s).
3. Obligations. As used herein, "Obligations" means (a) all
covenants and obligations of BHG, including obligations of performance, under
the Agreements arising or accruing after the Closing and on or prior to the
Effective Date and (b) all obligations of BHG under the Demand Note and Term
Note.
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4. Representations and Warranties. The Guarantors hereby
represent and warrant to ECS as follows:
(a) The execution, delivery and performance by the Guarantors of
this Guaranty does not and will not contravene or conflict
with (i) any law, order, rule, regulation, writ, injunction or
decree now in effect of any government, governmental
instrumentality or court having jurisdiction over the
Guarantors or (ii) any contractual restriction binding on or
affecting the Guarantors or any of its property or assets;
(b) This Guaranty creates legal, valid and binding obligations of
the Guarantors enforceable against them in accordance with its
terms;
(c) There is no action, proceeding or investigation pending or, to
the knowledge of the Guarantors, threatened affecting the
Guarantors which may adversely affect the Guarantors' ability
to fulfill and perform the Obligations and other undertakings
under this Guaranty; and
(d) The Guarantors are not insolvent on the date of this Guaranty
and will not become insolvent as a result of entering into
this Guaranty.
The Guarantors hereby agree to indemnify, defend and hold harmless ECS from and
against: (a) any loss, cost, damage or expense occurring by reason of a breach
of any of the foregoing representations and warranties; and (b) the loss,
mitigation, subordination or other consequences adverse to ECS by reason of any
performance of the Obligations being challenged as a preference or suffering
any other subjugation under any bankruptcy or other law, whether state or
federal, affecting debtors, creditors and/or the relationship between and among
them.
5. Governing Law. This Guaranty shall be governed by and
construed in accordance with the internal laws of the State of Delaware.
6. Amendment. This Guaranty may not be amended, modified or
supplemented except upon the expiration and delivery of a written agreement
executed by the parties hereto.
7. No Assignment. This Guaranty and all of the provisions hereof
shall be binding upon the Guarantors and shall inure to the benefit of ECS and
its respective successors. Neither this Guaranty nor any of the rights,
interest or obligations hereunder shall be assigned by ECS without the prior
written consent of the Guarantors.
8. Waiver. Any of the terms or conditions of this Guaranty which
may be lawfully waived may be waived in writing at any time by the entity which
is entitled to the benefits thereof. Any waiver of any of the provisions of
this Guaranty by any entity shall be binding only if set forth in an instrument
in writing signed on behalf of such entity. No waiver of any of the provisions
of this Guaranty shall be deemed to or shall constitute a waiver of any of the
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provisions of this Guaranty shall be deemed to or shall constitute a waiver of
any other provision hereof nor shall such waiver constitute a continuing
waiver.
9. Notices. All notices, requests, approvals, demands and other
communications required or permitted to be given under this Guaranty shall be
in writing and shall be deemed to have been duly given and to be effective when
delivered personally (including delivery by overnight, express or courier
service) or, if mailed, five days after being deposited in the United States
mail as registered or certified, postage prepaid, return receipt requested,
addressed as follows or to such other address as any such entity may designate
by notice:
If to the Guarantors: Integrated Health Options, LLC
00000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx
Illiana Behavioral Management, Inc.
00000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx,XX 00000
Attn: Xxxxx X. Xxxxxxxxx
BHG, Inc.
00000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx
with a copy to: Ungaretti & Xxxxxx
0000 Xxxxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
If to ECS: MHM Extended Care Services, Inc.
0000 Xxxxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: President
or to such other address as any such entity may, from time to time, designate
in a written notice given in like manner.
11. Complete Agreement, Conflict. This Guaranty and the other
documents and writings referred to herein or delivered pursuant hereto, contain
the entire understanding of the entities with respect to their subject matter.
This Guaranty supersedes all prior agreements and understandings, both written
and oral, between such entities with respect to such subject matter.
12. Headings. The headings contained in this Guaranty are for
reference only and shall not affect in any way the meaning or interpretation of
this Guaranty.
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13. Third Party Beneficiaries. Nothing in this Guaranty, expressed
or implied is intended to confer on any person other than ECS and its
successors any rights, remedies, obligations or liabilities under or by reason
of this Guaranty.
INTEGRATED HEALTH OPTIONS, LLC
By: /s/ XXXXX XXXXXXXXX
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Its: Manager
Printed Name: XXXXX XXXXXXXXX
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BHG, INC.
By: /s/ XXXXX XXXXXXXXX
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Its: President
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Printed Name: XXXXX XXXXXXXXX
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ILLIANA BEHAVIORAL MANAGEMENT,
INC.
By: /s/XXXXX XXXXXXXXX
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Its: President
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Printed Name: XXXXX XXXXXXXXX
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