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Exhibit 10.1
GUARANTY AGREEMENT ("Guaranty") dated as of April 16, 1997, between
HEALTH MANAGEMENT SYSTEMS, INC. (the "Guarantor") and THE CHASE MANHATTAN BANK
(the "Bank").
PRELIMINARY STATEMENT. The Bank has agreed to provide a One Million
Six Hundred Thousand Dollar ($1,600,000) loan (the "Loan") to Robert V.
Nagelhout (the "Borrower") pursuant to a Note dated the date hereof between the
Bank and the Borrower and any and all documentation executed in connection
therewith (as the same may be amended from time to time, the "Note"). It is a
condition precedent to the obligation of the Bank to provide the Loan that the
Guarantor shall have guaranteed the obligations of the Borrower under the Note
to the extent and in the manner herein set forth.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Bank to provide the Loan to the Borrower as provided in the Note, the
Guarantor hereby agrees as follows:
SECTION 1. Loan Guaranty. The Guarantor hereby irrevocably,
absolutely and unconditionally guarantees to the Bank and its successors,
endorsees, transferees and assigns the prompt and complete payment by the
Borrower, as and when due and payable (whether on a scheduled payment date, on
acceleration or otherwise), of all indebtedness, obligations and liabilities of
the Borrower to the Bank now existing or hereafter incurred under or arising out
of or in connection with the Loan, whether for principal, interest, fees,
expenses or otherwise (all such indebtedness, obligations, and liabilities being
herein called the "Loan Obligations"); and agrees to pay any and all expenses
(including reasonable counsel fees and expenses) which may be paid or incurred
by the Bank by reason of Borrower's default under the Note in collecting any or
all of the Loan Obligations and/or enforcing any rights under the Note or under
the Loan Obligations (the "Loan Guaranty").
SECTION 2. Guarantor's Obligations Unconditional. The Guarantor
hereby guarantees that the Loan Obligations will be paid strictly in accordance
with the terms of the Note, regardless of any law, now or hereafter in effect in
any jurisdiction affecting any such terms or the rights of the Bank with respect
thereto. The obligations and liabilities of the Guarantor under this Guaranty
shall be absolute and unconditional irrespective of: (1) any lack of validity or
enforceability of any of the Loan Obligations, the Note, or any agreement or
instrument relating thereto; (2) any change in the time, manner or place of
payment of, or in any other term in respect of, all or any of the Loan
Obligations, or any other amendment or waiver of or consent to any departure
from the Note; or (3) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, a guarantor in respect of the Loan
Obligations.
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This Guaranty is a continuing guaranty and shall remain in full
force and effect until: (1) the payment in full of all the Loan Obligations, and
(2) the payment of the other expenses to be paid by the Guarantor pursuant
hereto. This Guaranty shall continue to be effective or shall be reinstated, as
the case may be, if at any time any payment, or any part thereof, of any of the
Loan Obligations is rescinded or must otherwise be returned by the Bank upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or otherwise, all as though such payment had not been made.
The obligations and liabilities of the Guarantor under this Guaranty
shall not be conditioned or contingent upon the pursuit by the Bank or any other
person at any time of any right or remedy against the Borrower or any other
person which may be become liable in respect of all or any part of the Loan
Obligations or against any collateral or security or guarantee therefor or right
of setoff with respect thereto.
The Guarantor hereby consents that, without the necessity of any
reservation of rights against the Guarantor and without notice to or further
assent by the Guarantor, any demand for payment of any of the Loan Obligations
made by the Bank may be rescinded by the Bank and any of the Loan Obligations
continued after such rescission.
SECTION 3. Waivers. The Guarantor hereby waives: (a) promptness and
diligence; (b) notice of or proof of reliance by the Bank upon this Guaranty or
acceptance of this Guaranty; (c) notice of the incurrence of any Loan
Obligations by the Borrower or the renewal, extension or accrual of any Loan
Obligation; (d) notice of any actions taken by the Bank or the Borrower or any
other party under the Note or any other agreement or instrument relating
thereto; (e) all other notices, demands and protests, and all other formalities
of every kind in connection with the enforcement of the Loan Obligations or of
the obligations of the Guarantor hereunder, the omission of or delay in which,
but for the provisions of this Section 3, might constitute grounds for relieving
the Guarantor of its obligations hereunder; and (f) any requirement that the
Bank protect, secure, perfect or insure any lien or security interest, or any
property subject thereto or exhaust any right or take any action against the
Borrower or any other person or any collateral.
SECTION 4. Subrogation. The Guarantor will not exercise any rights
which it may acquire by way of subrogation under this Guaranty, whether acquired
by any payment made hereunder, by any setoff or application of funds of such
Guarantor by the Bank or otherwise, until (a) the payment in full of the Loan
Obligations, and (b) the payment of all other expenses to be paid by the
Guarantor pursuant hereto. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all of the Loan Obligations
and all such other
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expenses shall not have been paid in full, such amount shall be held in trust
for the benefit of the Bank, shall be segregated from the other funds of the
Guarantor and shall forthwith be paid over to the Bank to be credited and
applied in whole or in part by the Bank against the Loan Obligations, whether
matured or unmatured, and all such other expenses in accordance with the terms
of this Guaranty.
SECTION 5. Representations and Warranties. The Guarantor represents
and warrants as follows as of the date of this Guaranty:
(a) The Guarantor is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its assets and
to transact the business in which it is engaged or proposed to be engaged,
and is duly qualified as a foreign corporation and in good standing under
the laws of each other jurisdiction in which such qualification is
required except where failure to qualify would not have a material adverse
effect on Guarantor, its assets or properties.
(b) The execution, delivery and performance by the Guarantor of the
Guaranty has been duly authorized by all corporate action and does not and
will not: (i) require any consent or approval of its stockholders; (ii)
contravene its charter or by-laws; (iii) violate any provisions of any
law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect applicable to it; (iv) result
in a breach of, constitute a default under or otherwise contravene any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which it is a party or by which it or its properties may be
bound or affected; (v) result in, or require, the creations or imposition
of any lien, security interest or other charge or encumbrance upon or with
respect to any of its properties now owned or hereafter acquired: or (vi)
cause it to be in default under any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or any such
indenture, agreement, lease or instrument.
(c) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or other regulatory body is
required for the due execution, delivery and performance by the Guarantor
of this Guaranty.
(d) This Guaranty constitutes a legal valid and binding obligation
of the Guarantor enforceable in accordance with its terms, except to the
extent that such enforcement may be limited by applicable bankruptcy,
insolvency and other similar laws affecting creditor's rights generally.
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(e) Other than as disclosed on Schedule A attached hereto, there is
no action, suit or proceeding pending or to Guarantor's knowledge
threatened against or otherwise affecting the Guarantor before any court
or other governmental authority or any arbitrator which may, in any one
case or in the aggregate, materially adversely affect the financial
condition, operations, properties or business of the Guarantor or the
ability of the Guarantor to perform its obligations under this Guaranty.
SECTION 6. Right of Set-Off. If the Borrower defaults in the
payments or performance of any of its Loan Obligations the Bank may, and is
hereby authorized, at any time and from time to time, without notice to the
Guarantor (any such notice being expressly waived by the Guarantor), to set-off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by the Bank
to or for the credit or the account of the Guarantor against any and all
obligations of the Guarantor now or hereafter existing under this Guaranty,
irrespective of whether or not the Bank shall have made any demand under this
Guaranty and although such obligations may be contingent or unmatured. The Bank
agrees promptly to notify the Guarantor after any such set-off and application,
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of the Bank under this Section 6 are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) which the Bank may have.
SECTION 7. Indemnity and Expenses. (a) The Guarantor agrees to
indemnify the Bank from and against any and all claims, losses and liabilities
growing out of or resulting from this Guaranty to the extent of such claim, loss
or liability (including, without limitation, enforcement of this Guaranty
against the Guarantor), except claims, losses or liabilities resulting from the
Bank's gross negligence or willful misconduct.
(b) The Guarantor will upon demand and proof of the expenses being
incurred, pay to the Bank the amount of any and all expenses, including the
reasonable fees and disbursements of counsel to the Bank and of any experts and
agents, which the Bank may incur in connection with the enforcement of this
Guaranty. The Guarantor will upon demand and proof of the expenses being
incurred, pay to the Bank the amount of any and all expenses, including the
reasonable fees and disbursements of counsel to the Bank and of any experts and
agents, which the Bank may incur in connection with (i) the exercise or
enforcement of any of the rights of the Bank hereunder against the Guarantor, or
(ii) the failure by the Guarantor to perform or observe any of the provisions
hereof.
SECTION 8. Amendments, Etc. No amendment or waiver of any provision
of this Guaranty nor consent to any departure by the Guarantor herefrom
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shall in any event be effective unless the same shall be in writing and signed
by the Bank, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 9. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telegraphic
and telecopied communication) and, if to the Guarantor, mailed, telegraphed,
telecopied or delivered to the Guarantor, addressed to the Guarantor at 401 Park
Avenue South, New York, New York 10016, Attention: Phillip Siegel; with a copy
to the Guarantor's counsel at Coleman & Rhine, LLP, 1120 Avenue of the Americas,
New York, New York 10036, Attention: Kenneth S. Goodwin; if to the Bank, mailed,
telegraphed, telecopied or delivered to the Bank, addressed to the Bank at the
Manhattan Middle Market Division, 1411 Broadway, Fifth Floor, New York, New York
10018, Attention: Maria Florez; with a copy to Rodger Tighe, Esq., Dewey
Ballantine, 1301 Avenue of the Americas, New York, New York 10019; or as to
either party at such other address as shall be designated by such party in a
written notice to each other party complying as to delivery with the terms of
this Section. All such notices and other communications shall, when mailed,
telegraphed, telecopied or delivered, respectively, be effective when deposited
in the mails, telecopied, delivered to the telegraph company or delivered,
respectively, addressed as aforesaid.
SECTION 10. Assignment. The Bank may upon notice to Guarantor assign
or otherwise transfer the Loan Obligations held by it to any other person, and
such other person shall thereupon become vested with all the benefits in respect
thereof granted to the Bank herein or otherwise; provided, however, failure of
the Bank to deliver notice of assignment in no way limits the obligations of the
Guarantor under this Guaranty.
SECTION 11. Severability of Provisions. Any provision of this
Guaranty which is prohibited or unenforceable in any jurisdiction, shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 12. Headings. Section headings in this Guaranty are
included in this Guaranty for the convenience of reference only and shall not
constitute a part of the Guaranty for any other purpose.
SECTION 13. Governing Law. This Guaranty shall be governed by
and construed in accordance with the laws of the State of New York.
THE GUARANTOR WAIVES ANY RIGHT IT MAY HAVE TO A JURY
TRIAL.
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IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to
be duly executed and delivered by their officer thereunto duly authorized as of
the date first above written.
HEALTH MANAGEMENT SYSTEMS, INC.
By___________________________________
Name:
Title:
THE CHASE MANHATTAN BANK
By___________________________________
Name:
Title:
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