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EXHIBIT 99.4
GUARANTY
This GUARANTY is entered into as of the 14th day of March, 2000, by
UICI, a Delaware corporation ("Guarantor"), in favor of and for the benefit of
LM FINANCE, LLC., a Nevada limited liability company ("Lender") and its
successors and assigns.
RECITALS
A. UICI SUB I, INC., a Delaware corporation ( "Borrower") has entered
into that certain Promissory Note dated as of March 14, 2000, in favor of Lender
(said Promissory Note, as amended, supplemented or otherwise modified from time
to time being the "Promissory Note"; capitalized terms not otherwise defined
herein shall have the meaning ascribed to such terms in the Promissory Note).
B. Borrower is a wholly-owned subsidiary of Guarantor. Guarantor will
receive direct and indirect benefits from the transactions contemplated by the
Promissory Note in an amount at least equal to the obligations of Guarantor
under this Guaranty, and the loans to the Borrower pursuant to the Promissory
Note will produce direct financial benefits to the Guarantor.
C. It is a condition of the Promissory Note that Borrower's obligations
thereunder be guaranteed by Guarantor.
D. Guarantor is willing irrevocably and unconditionally to guaranty
such obligations of Borrower subject to the terms and provisions hereof.
NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce Lender to enter into the Promissory Note and to make the
loans thereunder, Guarantor hereby agrees as follows:
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms. As used in this Guaranty, the following
terms shall have the following meanings unless the context otherwise requires:
"Guaranteed Obligations" means:
(a) all principal, interest, reasonable attorneys' fees
actually incurred, liabilities for costs and expenses and other
indebtedness, obligations and liabilities owed to Lender from Borrower,
Guarantor or any other party guaranteeing or granting collateral for
the Promissory Note and any other Loan Document (as defined in the
Promissory Note) and any renewals, modifications, increases and
extensions of the Promissory Note or any Loan Document; and
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(b) all costs, expenses and fees, including but not limited to
court costs and reasonable attorneys' fees, arising in connection with
the collection of any or all amounts, indebtedness, obligations and
liabilities described above.
"Guaranty" means this Guaranty, dated as of March 14, 2000, as
it may be amended, supplemented or otherwise modified from time to
time.
"payment in full" or "paid in full" means the final and
indefeasible payment in full - in cash or such other type of payment or
satisfaction as Lender may approve.
1.2 Interpretation.
(a) References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Guaranty unless
otherwise specifically provided.
(b) In the event of any conflict or inconsistency between the
terms, conditions and provisions of this Guaranty and the terms,
conditions and provisions of the Promissory Note, the terms, conditions
and provisions of this Guaranty shall prevail.
SECTION 2. THE GUARANTY
2.1 Guaranty of the Guaranteed Obligations. Subject to the provisions
of subsection 2.2(a), Guarantor hereby irrevocably and unconditionally
guarantees, as a primary obligor and not merely as a surety, the due and
punctual payment in full of all Guaranteed Obligations when the same shall
become due, whether at stated maturity, by required prepayment, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. ss. 362(a)), as amended.
2.2 Limitation on Amount Guaranteed; Contribution by Guarantor. (a)
Anything contained in this Guaranty to the contrary notwithstanding, the
obligations of Guarantor hereunder shall be limited to a maximum aggregate
amount equal to the largest amount that would not render its obligations
hereunder subject to avoidance as a fraudulent transfer or conveyance under
Section 548 of Title 11 of the United States Code, as amended, or any applicable
provisions of comparable state law (collectively, the "Fraudulent Transfer
laws"), in each case after giving effect to all other liabilities of Guarantor,
contingent or otherwise, that are relevant under the Fraudulent Transfer laws
(specifically excluding, however, any liabilities of Guarantor in respect of
intercompany indebtedness to Borrower or other subsidiaries or affiliates of
Borrower to the extent that such indebtedness would be discharged in an amount
equal to the amount paid by Guarantor hereunder and after giving effect as
assets to the value (as determined under the applicable provisions of the
Fraudulent Transfer laws) of any rights to subrogation or contribution of
Guarantor pursuant to (i) applicable law or (ii) any agreement providing for an
equitable allocation among Guarantor and other subsidiaries or affiliates of
Borrower of obligations arising under guaranties by such parties.
(b) Guarantor under this Guaranty, and each guarantor under other
guaranties, if any, relating to the Promissory Note (the "Related Guaranties")
which contain a contribution provision
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similar to that set forth in this subsection 2.2(b), together desire to allocate
among themselves (collectively, the "Contributing Guarantors"), in a fair and
equitable manner, their obligations arising under this Guaranty and the Related
Guaranties. Accordingly, in the event any payment or distribution is made by
Guarantor under this Guaranty or a guarantor under a Related Guaranty (a
"Funding Guarantor") that exceeds its Fair Share (as defined below), that
Funding Guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in the amount of such other Contributing Guarantor's
Fair Share Shortfall (as defined below), with the result that all such
contributions will cause each Contributing Guarantor's Aggregate Payments (as
defined below) to equal its Fair Share. "Fair Share" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (i)
the ratio of (x) the Adjusted Maximum Amount (as defined below) with respect to
such Contributing Guarantor to (y) the aggregate of the Adjusted Maximum Amounts
with respect to all Contributing Guarantors, multiplied by (ii) the aggregate
amount paid or distributed on or before such date by all Funding Guarantors
under this Guaranty and the Related Guaranties in respect of the obligations
guarantied. "Fair Share Shortfall" means, with respect to a Contributing
Guarantor as of any date of determination, the excess, if any, of the Fair Share
of such Contributing Guarantor over the Aggregate Payments of such Contributing
Guarantor. "Adjusted Maximum Amount" means, with respect to a Contributing
Guarantor as of any date of determination, the maximum aggregate amount of the
obligations of such Contributing Guarantor under this Guaranty and the Related
Guaranties, determined in accordance with subsection 2.2(a) or, if applicable, a
similar provision contained in a Related Guaranty; provided that, solely for
purposes of calculating the "Adjusted Maximum Amount" with respect to any
Contributing Guarantor for purposes of this subsection 2.2(b), the assets or
liabilities arising by virtue of any rights to or obligations of contribution
hereunder or under any similar provision contained in a Related Guaranty shall
not be considered as assets or liabilities of such Contributing Guarantor.
"Aggregate Payments" means, with respect to a Contributing Guarantor as of any
date of determination, the aggregate amount of all payments and distributions
made on or before such date by such Contributing Guarantor in respect of this
Guaranty and the Related Guaranties (including, without limitation, in respect
of this subsection 2.2(b) or any similar provision contained in a Related
Guaranty). The amounts payable as contributions hereunder and under similar
provisions in the Related Guaranties shall be determined as of the date on which
the related payment or distribution is made by the applicable Funding Guarantor.
The allocation among Contributing Guarantors of their obligations as set forth
in this subsection 2.2(b) or any similar provision contained in a Related
Guaranty shall not be construed in any way to limit the liability of any
Contributing Guarantor hereunder or under a Related Guaranty. Each Contributing
Guarantor under a Related Guaranty is a third party beneficiary to the
contribution agreement set forth in this subsection 2.2(b).
2.3 Liability of Guarantor Absolute. Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guaranteed Obligations. In furtherance of the foregoing and without limiting the
generality thereof, Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
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(b) Lender may enforce this Guaranty upon the occurrence of
and during the continuation of a Default under the Promissory Note
notwithstanding the existence of any dispute between Lender and
Borrower with respect to the existence of such Default.
(c) The obligations of Guarantor hereunder are independent of
the obligations of Borrower under the Loan Documents and the
obligations of any other guarantor of the obligations of Borrower under
the Loan Documents, and a separate action or actions may be brought and
prosecuted against Guarantor whether or not any action is brought
against Borrower or any of such other guarantors and whether or not
Borrower is joined in any such action or actions.
(d) Guarantor's payment of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge
Guarantor's liability for any portion of the Guaranteed Obligations
which has not been paid. Without limiting the generality of the
foregoing, if Lender is awarded a judgment in any suit brought to
enforce Guarantor's covenants to pay a portion of the Guaranteed
Obligations, such judgment shall not be deemed to release Guarantor
from its covenant to pay the portion of the Guaranteed Obligations that
is not the subject of such suit.
(e) Subject to the terms of the Promissory Note, Lender, upon
such terms as it deems appropriate, without notice or demand and
without affecting the validity or enforceability of this Guaranty or
giving rise to any reduction, limitation, impairment, discharge or
termination of Guarantor's liability hereunder, at any time and from
time to time, may (i) renew, extend, accelerate, increase the rate of
interest on, or otherwise change the time, place, manner or terms of
payment of the Guaranteed Obligations, (ii) settle, compromise, release
or discharge, or accept or refuse any offer of performance with respect
to, or substitutions for, the Guaranteed Obligations or any agreement
relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other
guaranties of the Guaranteed Obligations and take and hold security for
the payment of this Guaranty or the Guaranteed Obligations; (iv)
release, surrender, exchange, substitute, compromise, settle, rescind,
waive, alter, subordinate or modify, with or without consideration, any
security for payment of the Guaranteed Obligations, any other
guaranties of the Guaranteed Obligations, including, without
limitation, any Related Guaranties or any other obligation of any
person with respect to the Guaranteed Obligations; (v) enforce and
apply any security now or hereafter held by or for the benefit of
Lender in respect of this Guaranty or the Guaranteed Obligations and
direct the order or manner of sale thereof, or exercise any other right
or remedy that Lender may have against any such security, as Lender in
its discretion may determine consistent with the Promissory Note and
any applicable security agreement, including foreclosure on any such
security pursuant to one or more judicial or nonjudicial sales, whether
or not every aspect of any such sale is commercially reasonable, and
even though such action operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of Guarantor
against Borrower or any security for the Guaranteed Obligations; and
(vi) exercise any other rights available to it under the Loan
Documents.
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(f) This Guaranty and the obligations of Guarantor hereunder
shall be valid and enforceable and shall not be subject to any
reduction, limitation, impairment, discharge or termination for any
reason (other than payment in full of the Guaranteed Obligations),
including without limitation the occurrence of any of the following,
whether or not Guarantor shall have had notice or knowledge of any of
them: (i) any failure or omission to assert or enforce or agreement or
election not to assert or enforce, or the stay or enjoining, by order
of court, by operation of law or otherwise, of the exercise or
enforcement of, any claim or demand or any right, power or remedy
(whether arising under the Loan Documents, at law, in equity or
otherwise) with respect to the Guaranteed Obligations or any agreement
relating thereto, or with respect to any other guaranty of or security
for the payment of the Guaranteed Obligations; (ii) any rescission,
waiver, amendment or modification of, or any consent to departure from,
any of the terms or provisions (including without limitation provisions
relating to events of default) of the Promissory Note, any of the other
Loan Documents or any agreement or instrument executed pursuant
thereto, or of any other guaranty or security for the Guaranteed
Obligations, (iii) the Guaranteed Obligations, or any agreement
relating thereto, at any time being found to be illegal, invalid or
unenforceable in any respect; (iv) the application of payments received
from any source (other than payments received pursuant to the other
Loan Documents or from the proceeds of any security for the Guaranteed
Obligations) to the payment of indebtedness other than the Guaranteed
Obligations, even though Lender might have elected to apply such
payment to any part or all of the Guaranteed Obligations; (v) Lender's
consent to the change, reorganization or termination of the corporate
structure or existence of Borrower and to any corresponding
restructuring of the Guaranteed Obligations; (vi) any failure to
perfect or continue perfection of a security interest in any collateral
which secures any of the Guaranteed Obligations; (vii) any defenses,
set-offs or counterclaims which Borrower may allege or assert against
Lender in respect of the Guaranteed Obligations, including but not
limited to failure of consideration, breach of warranty, statute of
frauds, statute of limitations, accord and satisfaction and usury; and
(viii) any other act or thing or omission, or delay to do any other act
or thing, which may or might in any manner or to any extent vary the
risk of Guarantor as obligor in respect of the Guaranteed Obligations.
2.4 Waivers by Guarantor. Guarantor hereby waives, for the benefit of
Lender:
(a) any right to require Lender, as a condition of payment or
performance by Guarantor, to (i) proceed against Borrower, any other
guarantor of the Guaranteed Obligations or any other person, (ii)
proceed against or exhaust any security held from Borrower, any other
guarantor of the Guaranteed Obligations or any other person, (iii)
proceed against or have resort to any balance of any deposit account or
credit on the books of Lender in favor of Borrower or any other person,
or (iv) pursue any other remedy in the power of Lender whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Borrower including,
without limitation, any defense based on or arising out of the lack of
validity or the unenforceability of the Guaranteed Obligations or any
agreement or instrument relating thereto or by reason of the cessation
of the liability of Borrower from any cause other than payment in full
of the Guaranteed Obligations;
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(c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the
principal;
(d) any defense based upon Lender's errors or omissions in the
administration of the Guaranteed Obligations, except behavior which
amounts to gross negligence or willful misconduct as determined by a
court of competent jurisdiction;
(e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of Guarantor's
obligations hereunder, (ii) the benefit of any statute of limitations
affecting Guarantor's liabilities hereunder or the enforcement hereof,
(iii) any rights to set-offs, recoupments and counterclaims, and (iv)
promptness, diligence and any requirement that Lender protect, secure,
perfect or insure any security interest or lien or any property subject
thereto;
(f) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Guaranty, notices of default under the
Promissory Note or any agreement or instrument related thereto, notices
of any renewal, extension or modification of the Guaranteed Obligations
or any agreement related thereto, notices of any extension of credit to
Borrower and notices of any of the matters referred to in subsection
2.3 and any right to consent to any thereof; and
(g) any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Guaranty.
2.5 Payment by Guarantor; Application of Payments. Subject to the
provisions of subsection 2.2(a), Guarantor hereby agrees in furtherance of the
foregoing and not in limitation of any other right which Lender or any other
person may have at law or in equity against Guarantor by virtue hereof, that
upon the failure of Borrower to pay any of the Guaranteed Obligations when and
as the same shall become due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including amounts
that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. ss. 362(a)), Guarantor will forthwith
pay, or cause to be paid, in cash, to Lender, an amount equal to the sum of the
unpaid principal amount of all Guaranteed Obligations then due as aforesaid,
accrued and unpaid interest on such Guaranteed Obligations (including, without
limitation, interest which, but for the filing of a petition in bankruptcy with
respect to Borrower, would have accrued on such Guaranteed Obligations, whether
or not a claim is allowed against Borrower for such interest in any such
bankruptcy proceeding) and all other Guaranteed Obligations then owed to Lender
as aforesaid. All such payments shall be applied promptly from time to time by
Lender:
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First, to the payment of the costs and expenses of any
collection or other realization under this Guaranty, including
reasonable compensation to Lender and its agents and counsel, and all
expenses, liabilities and advances made or incurred by Lender in
connection therewith;
Second, to the payment of all other Guaranteed Obligations;
and
Third, after payment in full of all Guaranteed Obligations, to
the payment to Guarantor, or its successors or assigns, or to
whomsoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such payments.
2.6 Subrogation. Until the Guaranteed Obligations shall have been paid
in full, Guarantor shall withhold exercise of (a) any right of subrogation, (b)
any right of contribution Guarantor may have against any other guarantor of the
Guaranteed Obligations, (c) any right to enforce any remedy which Lender now has
or may hereafter have against Borrower or (d) any benefit of, and any right to
participate in, any security now or hereafter held by Lender. Guarantor further
agrees that, to the extent the withholding of the exercise of its rights of
subrogation and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation Guarantor may have against Borrower or against any collateral or
security, and any rights of contribution Guarantor may have against any other
guarantor, shall be junior and subordinate to any rights Lender may have against
Borrower, to all right, title and interest Lender may have in any such
collateral or security, and to any right Lender may have against such other
guarantor. Lender, may use, sell or dispose of any item of collateral or
security as it sees fit without regard to any subrogation rights Guarantor may
have, and upon any such disposition or sale any rights of subrogation Guarantor
may have with respect to such sale or disposition shall terminate. If any amount
shall be paid to Guarantor on account of such subrogation rights at any time
when all Guaranteed Obligations shall not have been paid in full, such amount
shall be held in trust for Lender and shall forthwith be paid over to Lender to
be credited and applied against the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of the Promissory Note or any applicable
security agreement.
2.7 Subordination of Other Obligations of Borrower. Any indebtedness of
Borrower now or hereafter held by Guarantor is hereby subordinated in right of
payment to the Guaranteed Obligations, provided prior to a Default, Guarantor
may receive ordinary course or regularly scheduled payments of such
indebtedness. Any such indebtedness of Borrower to Guarantor collected or
received by Guarantor after a Default has occurred and is continuing shall be
held in trust for Lender and shall forthwith be paid over to Lender to be
credited and applied against the Guaranteed Obligations but without affecting,
impairing or limiting in any manner the liability of Guarantor under any other
provision of this Guaranty.
2.8 Expenses. Guarantor agrees to pay, or cause to be paid, and to save
Lender harmless against liability for, any and all reasonable costs and expenses
(including reasonable fees and disbursements of counsel and allocated costs of
internal counsel) incurred or expended by Lender in connection with the
enforcement of or preservation of any rights under this Guaranty.
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2.9 Continuing Guaranty. This Guaranty is a continuing guaranty and
shall remain in effect until all of the Guaranteed Obligations shall have been
paid in full.
2.10 Financial Condition of Borrower. Any future extensions of credit
may be granted to Borrower or continued from time to time without notice to or
authorization from Guarantor regardless of the financial or other condition of
Borrower at the time of any such grant or continuation. Lender shall have no
obligation to disclose or discuss with Guarantor their assessment, or
Guarantor's assessment, of the financial condition of Borrower. Guarantor has
adequate means to obtain information from Borrower on a continuing basis
concerning the financial condition of Borrower and its ability to perform its
obligations under the Loan Documents, and Guarantor assumes the responsibility
for being and keeping informed of the financial condition of Borrower and of all
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations.
Guarantor hereby waives and relinquishes any duty on the part of Lender to
disclose any matter, fact or thing relating to the business, operations or
conditions of Borrower now known or hereafter known by Lender.
2.11 Rights Cumulative. The rights, powers and remedies given to Lender
by this Guaranty are cumulative and shall be in addition to and independent of
all rights, powers and remedies given to Lender by virtue of any statute or rule
of law or in any of the other Loan Documents or any agreement between Guarantor
and Lender or between Borrower and Lender. Any forbearance or failure to
exercise, and any delay by Lender in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be construed to be
a waiver thereof, nor shall it preclude the further exercise of any such right,
power or remedy.
2.12 Bankruptcy: Post-Petition Interest: Reinstatement of Guaranty.
(a) So long as any Guaranteed Obligations remain outstanding,
Guarantor shall not, without the prior written consent of Lender in
accordance with the terms of the Promissory Note, commence or join with
any other person in commencing any bankruptcy, reorganization or
insolvency proceedings of or against Borrower. The obligations of
Guarantor under this Guaranty shall not be reduced, limited, impaired,
discharged, deferred, suspended or terminated by any proceeding,
voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of Borrower or
by any defense which Borrower may have by reason of the order, decree
or decision of any court or administrative body resulting from any such
proceeding.
(b) Guarantor acknowledges and agrees that any interest on any
portion of the Guaranteed Obligations which accrues after the
commencement of any proceeding referred to in clause (a) above (or, if
interest on any portion of the Guaranteed Obligations ceases to accrue
by operation of law by reason of the commencement of said proceeding,
such interest as would have accrued on such portion of the Guaranteed
Obligations if said proceedings had not been commenced) shall be
included in the Guaranteed Obligations because it is the intention of
Guarantor and Lender that the Guaranteed Obligations which are
guaranteed by Guarantor pursuant to this Guaranty should be determined
without
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regard to any rule of law or order which may relieve Borrower of any
portion of such Guaranteed Obligations. Guarantor will permit any
trustee in bankruptcy, receiver, debtor in possession, assignee for the
benefit of creditors or similar person to pay Lender, or allow the
claim of Lender in respect of, any such interest accruing after the
date on which such proceeding is commenced.
(c) In the event that all or any portion of the Guaranteed
Obligations are paid by Borrower, the obligations of Guarantor
hereunder shall continue and remain in full force and effect or be
reinstated, as the case may be, in the event that all or any part of
such payment(s) are rescinded or recovered directly or indirectly from
Lender as a preference, fraudulent transfer or otherwise, and any such
payments which are so rescinded or recovered shall constitute
Guaranteed Obligations for all purposes under this Guaranty.
2.13 Notice of Events. As soon as Guarantor obtains knowledge thereof,
and to the extent Borrower had such knowledge would be required to do so under
any Loan Document, Guarantor shall give Lender written notice of any condition
or event which has resulted or might reasonably be expected to result in (a) a
material adverse change in the financial condition of Guarantor and Borrower,
taken as a whole, or (b) a breach of or noncompliance with any term, condition
or covenant contained herein or in the Promissory Note, any other Loan Document
or in any document delivered pursuant hereto or thereto, or (c) a material
breach of, or material noncompliance with, any material term, condition or
covenant of any material contract to which Guarantor or Borrower is a party or
by which Guarantor or Borrower or Guarantor's or Borrower's property may be
bound.
2.14 Set Off. In addition to any other rights Lender may have under law
or in equity, if any amount shall at any time be due and owing by Guarantor to
Lender under this Guaranty from and after the occurrence of a Default and during
the continuation thereof, Lender is authorized at any time or from time to time,
without notice (any such notice being hereby expressly waived), to set off and
to appropriate and to apply any and all deposits (general or special, including
but not limited to indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness of Lender owing to Guarantor
and any other property of Guarantor held by Lender to or for the credit or the
account of Guarantor against and on account of the Guaranteed Obligations and
liabilities of Guarantor to Lender under this Guaranty. After exercising any
right to set off, appropriate or apply any deposits or other indebtedness of
Guarantor, Lender exercising such right shall endeavor to provide notice of such
set off, appropriation or application to Guarantor promptly, but any failure to
do so shall not affect the validity of any such set off, appropriation or
application.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce Lender to accept this Guaranty and to enter into the
Promissory Note and extend credit to Borrower thereunder, Guarantor hereby
represents and warrants to Lender that the following statements are true and
correct:
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3.1 Corporate Existence. Guarantor is duly organized, validly existing
and in good standing under the laws of the state of its incorporation, has the
corporate power to own its assets and to transact the business in which it is
now engaged and is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification.
3.2 Corporate Power: Authorization: Enforceable Obligations. Guarantor
has the corporate power, authority and legal right to execute, deliver and
perform this Guaranty and all other Loan Documents to which Guarantor is a party
(all such agreements herein collectively referred to as the "Guarantor
Agreements") and all obligations required under the Guarantor Agreements and has
taken all necessary corporate action to authorize the Guarantor Agreements on
the terms and conditions of such agreements and its execution, delivery and
performance of the Guarantor Agreements and all obligations required under such
agreements. No consent of any other person including, without limitation,
stockholders and creditors of Guarantor, and no license, permit, approval or
authorization of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required by Guarantor in
connection with the Guarantor Agreements or the execution, delivery,
performance, validity or enforceability of the Guarantor Agreements and the
obligations required under such agreements except for (i) such consents which
have been validly obtained, or (ii) in the case of any leasehold interest of
Guarantor, Guarantor has used commercially reasonable efforts to obtain any such
consent and the failure of Guarantor to obtain any such consent is the result of
the exercise by a landlord of such landlord's existing contractual right to
withhold such consent. The Guarantor Agreements have been, and each instrument
or document required in connection with such agreements will be, executed and
delivered by a duly authorized officer of Guarantor, and the Guarantor
Agreements constitute, and each instrument or document required in connection
therewith when executed and delivered will constitute, the legally valid and
binding obligation of Guarantor, enforceable against Guarantor in accordance
with its respective terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws or
equitable principles relating to or limiting creditors' rights generally.
3.3 No Legal Bar to this Guaranty. The execution, delivery and
performance of the Guarantor Agreements and the documents or instruments
required in connection therewith, and the use of the proceeds of the borrowings
under the Promissory Note, will not violate any provision of any existing law or
regulation binding on Guarantor, or any order, judgment, award or decree of any
court, arbitrator or governmental authority binding on Guarantor, or the
certificate of incorporation or bylaws of Guarantor or any securities issued by
Guarantor, or any mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which Guarantor is a party or by which Guarantor or
any of its assets may be bound, the violation of which would have a material
adverse effect on the business, operations, assets or financial condition of
Guarantor and will not result in, or require, the creation or imposition of any
lien on any of its property, assets or revenues pursuant to the provisions of
any such mortgage, indenture, lease, contract or other agreement, instrument or
undertaking.
3.4 Benefit to Guarantor. Borrower is a subsidiary of Guarantor, and
Guarantor's board of directors has determined, as evidenced by resolution duly
adopted and in full force and effect on the date hereof, that Guarantor will
receive direct and indirect benefit from the
GUARANTY - PAGE 10
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transactions contemplated by the Promissory Note in an amount at least equal to
the obligations of Guarantor under this Guaranty, and that loans to Borrower
produce direct financial benefits to Guarantor. Therefore, the value of the
consideration received and to be received by Guarantor as a result of
Guarantor's entering into this Guaranty and each of the other Loan Documents to
which it is a party is reasonably worth at least as much as the liability and
obligations of Guarantor hereunder and under the other Loan Documents to which
Guarantor is a party and such liability and obligations have benefitted and may
reasonably be expected to benefit Guarantor directly.
SECTION 4. COVENANTS.
Guarantor covenants and agrees that, unless and until all of the
Guaranteed Obligations shall have been paid in full, unless Lender shall
otherwise consent in writing:
4.1 Corporate Existence, Etc. Guarantor shall at all times preserve and
keep in full force and effect its corporate existence and all rights and
franchises material to its business, except as may be expressly provided in the
Promissory Note.
4.2 Compliance with Laws, Etc. Guarantor shall comply in all material
respects with all applicable laws, rules, regulations and orders, such
compliance to include, without limitation, paying when due all taxes,
assessments and governmental charges imposed upon it or upon any of its
properties or assets or in respect of any of its franchises, businesses, income
or property before any penalty or interest accrues thereon unless such tax,
assessment or charge is being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and Guarantor has established such
reserve or other appropriate provision, if any, as shall be required in
conformity with general accepted accounting principals; provided that Guarantor
shall in any event pay such taxes, assessments and governmental charges not
later than five (5) days prior to the date of any proposed sale under any
judgment, writ or warrant of attachment entered or filed against Guarantor as a
result of the failure to make such payment.
4.3 Books and Records. Guarantor shall keep and maintain books of
record and account with respect to its operations in accordance with generally
accepted accounting principles and shall permit Lender and its respective
officers, employees and authorized agents to examine, copy and make excerpts
from the books and records of Guarantor, if any, and to inspect the properties
of Guarantor, both real and personal, at such reasonable times as Lender may
request.
SECTION 5. MISCELLANEOUS
5.1 Survival of Warranties. All agreements, representations and
warranties made herein shall survive the execution and delivery of this Guaranty
and the execution and delivery of the Promissory Note.
5.2 Notices. Any communications between Lender and Guarantor and any
notices or requests provided herein to be given may be given by mailing the
same, postage prepaid, or by telex, facsimile transmission or cable to each such
party at its address set forth in or determined pursuant to the Promissory Note,
on the signature pages hereof or to such other addresses as each
GUARANTY - PAGE 11
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such party may in writing hereafter indicate. Any notice, request or demand to
or upon Lender or Guarantor shall not be effective until received.
5.3 Severability. In case any provision in or obligation under this
Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
5.4 Amendments and Waivers. No amendment, modification, termination or
waiver of any provision of this Guaranty, or consent to any departure by
Guarantor therefrom, shall in any event be effective unless in writing and
signed by Lender. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
5.5. Headings. Section and subsection headings in this Guaranty are
included herein for convenience of reference only and shall not constitute a
part of this Guaranty for any other purpose or be given any substantive effect.
5.6 Applicable Law. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
GUARANTOR AND LENDER HEREUNDER AND ALL OTHER ASPECTS HEREOF SHALL BE DEEMED TO
BE MADE UNDER, SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN SUCH STATE.
5.7 Successors and Assigns; Reliance by Lender. This Guaranty is a
continuing guaranty and shall be binding upon Guarantor and its successors and
assigns. This Guaranty shall inure to the benefit of Lender and its respective
successors and assigns, including, without limitation, any subsequent holder of
all or any part of the Obligations. Guarantor shall not assign this Guaranty nor
any of the rights or obligations of Guarantor hereunder without the prior
written consent of Lender. Lender may, without notice or consent, assign its
interest in this Guaranty in whole or in part as part of a sale or other
transfer of the Promissory Note, and/or all or any portion of its interest in
the Loans (whether by direct transfer, transfer of a participation interest, or
otherwise). The terms and provisions of this Guaranty shall inure to the benefit
of any assignee or transferee of the Promissory Note and/or any interest in the
Promissory Note, and in the event of such transfer or assignment the rights and
privileges herein conferred upon Lender shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
hereof.
5.8 Consent to Jurisdiction and Service of Process. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR RELATING TO THIS
GUARANTY OR ANY OTHER LOAN DOCUMENT TO WHICH GUARANTOR IS A PARTY MAY BE BROUGHT
IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION LOCATED IN THE STATE OF
TEXAS AND BY EXECUTION AND DELIVERY OF THIS GUARANTY GUARANTOR ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
GUARANTY - PAGE 12
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DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY AND/OR ANY OTHER LOAN
DOCUMENT TO WHICH GUARANTOR IS A PARTY. Guarantor hereby agrees that service of
process sufficient for personal jurisdiction in any action against Guarantor in
the State of Texas may be made by registered or certified mail, return receipt
requested, to Guarantor in accordance with subsection 5.2, and Guarantor hereby
acknowledges that such service shall be effective and binding in every respect.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of Lender to bring proceedings against
Guarantor in the courts of any other jurisdiction.
5.9 Waiver of Trial by Jury. GUARANTOR AND, BY ITS ACCEPTANCE OF THE
BENEFITS HEREOF, AND LENDER HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
GUARANTY OR ANY OTHER LOAN DOCUMENT TO WHICH GUARANTOR IS A PARTY. The scope of
this waiver is intended to be all-encompassing of any and all disputes that may
be filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty claims
and all other common law and statutory claims. Guarantor and, by their
acceptance of the benefits hereof, Lender (i) acknowledges that this waiver is a
material inducement for Guarantor, Lender to enter into a business relationship,
that Guarantor, Lender has already relied on this waiver in entering into this
Guaranty or accepting the benefits thereof, as the case may be, and that each
will continue to rely on this waiver in their related future dealings and (ii)
further warrants and represents that each has reviewed this waiver with its
legal counsel, and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS GUARANTY AND ANY OTHER LOAN DOCUMENT TO WHICH GUARANTOR IS A PARTY. In
the event of litigation, this Guaranty may be filed as a written consent to a
trial by the court.
5.10 No Other Writing. This writing is intended by Guarantor and Lender
as the final expression of this Guaranty and is also intended as a complete and
exclusive statement of the terms of their agreement with respect to the matters
covered hereby. No course of dealing, course of performance or trade usage, and
no parol evidence of any nature, shall be used to supplement or modify any terms
of this Guaranty. There are no conditions to the full effectiveness of this
Guaranty.
5.11 Further Assurances. At any time or from time to time, upon the
request of Lender, Guarantor shall execute and deliver such further documents
and do such other acts and things as Lender may reasonably request in order to
effect fully the purposes of this Guaranty.
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, Guarantor has executed this Guaranty by its duly
authorized officer as of the date first above written.
UICI,
a Delaware corporation
By:
-------------------------------------
Name: Xxxxx X. Xxxx
Title: Executive Vice President
Address: 0000 XxXxxx Xxxx., Xxxxx 000
Xxxxxx, Xxxxx 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
Accepted by:
LM FINANCE, LLC.
By:
------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Secretary
GUARANTY - SIGNATURE PAGE