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EXHIBIT 99.7
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT is made by PRN HOLDINGS, INC., a Delaware
corporation, whose address is One MEDIQ Plaza, Pennsauken, New Jersey 08110
("Guarantor"), in favor of KCI THERAPEUTIC SERVICES, INC., a Delaware
corporation ("KCIT");
W I T N E S S E T H:
WHEREAS, in connection with the sale to MEDIQ/PRN Life Support
Services-I, Inc. ("Borrower") by KCIT of certain assets of KCIT pursuant to the
terms of that certain Asset Purchase Agreement (so called herein) dated August
23, 1994, as amended by Amendment No. 1 to Asset Purchase Agreement dated as of
September 30, 1994, by and among Kinetic Concepts, Inc., a Texas corporation
("KCI"), KCIT, Guarantor, MEDIQ Incorporated ("MEDIQ") and Borrower, KCIT has
made available to Borrower, MEDIQ/PRN Life Support Services, Inc. ("PRN")
and/or Guarantor, as the case may be, several seller financing loans
(collectively the "Loan") being evidenced by the following: (i) a Promissory
Note (the "$2,956,957 Note") dated the date hereof, in the original principal
amount of $2,956,957, executed by Borrower and made payable to the order of
KCIT, (ii) a Promissory Note (the "$5,835,707 Note") dated the date hereof, in
the original principal amount of $5,835,707, executed by PRN and made payable
to the order of KCIT; (iii) a Promissory Note ("Holdings Note-I") dated the
date hereof, in the original principal amount of $5,000,000 executed by
Guarantor and payable to the order of KCIT; (iv) a Promissory Note ("Holdings
Note-II") dated the date hereof in the original principal amount of $3,000,000
executed by Guarantor and payable to the order of KCIT; and (v) a Promissory
Note ("Holdings Note-III") dated the date hereof, in the original principal
amount of $2,000,000 executed by Guarantor and payable to the order of KCIT
(the $2,956,957 Note and the $5,835,707 Note, are herein collectively called
the "Guaranteed Notes" and Holdings Note-I, Holdings Note-II and Holdings
Note-III are herein collectively called the "Holdings Notes"), the Guaranteed
Notes and the Holdings Notes being entitled to the benefit of a Negative
Covenants Agreement executed by Borrower, MEDIQ and Guarantor in favor of KCI
and KCIT (such Negative Covenants Agreement, being herein called the "Negative
Covenants Agreement" and the Asset Purchase Agreement being herein called the
"Acquisition Agreement"), and;
WHEREAS, KCIT has made it a condition precedent to KCIT making the
Loan available to Borrower, PRN and Guarantor that Guarantor guaranty payment
of the Guaranteed Notes on the terms and conditions set forth in this Guaranty
Agreement;
AGREEMENT:
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and as a material inducement to
KCIT to extend credit to Borrower, PRN and Guarantor, Guarantor hereby
guaranties to KCIT the prompt and full
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payment of the Indebtedness described in Section 1 below in this Guaranty
(collectively called the "Guaranteed Obligations"), this Guaranty being upon
the following terms and conditions:
1. GUARANTY OF PAYMENT. Guarantor hereby unconditionally and irrevocably
guarantees to KCIT the punctual payment when due, whether by lapse of
time, by acceleration of maturity, or otherwise, and at all times
thereafter, of all principal, interest (including interest accruing
after the commencement of any bankruptcy or insolvency proceeding by
or against Borrower or PRN as the case may be, whether or not allowed
in such proceeding), costs, expenses, and other sums of money now or
hereafter due and owing pursuant to (i) the terms of the Guaranteed
Notes, and (ii) all renewals, extensions, refinancings, modifications,
supplements or amendments of such indebtedness or any part thereof
(the indebtedness described in clauses (i) and (ii) above in this
Section 1 is herein collectively called the "Indebtedness"). This
Guaranty covers the Indebtedness, whether presently outstanding or
arising subsequent to the date hereof. The guaranty of Guarantor as
set forth in this Section 1 is a continuing guaranty of payment and
not a guaranty of collection.
2. PRIMARY LIABILITY OF GUARANTOR.
(a) This Guaranty is an absolute, irrevocable and unconditional
guaranty of payment. Guarantor shall be liable for the payment
of the Guaranteed Obligations, as set forth in this Guaranty,
as a primary obligor. This Guaranty shall be effective as a
waiver of, and Guarantor hereby expressly waives, any and all
rights to which Guarantor may otherwise have been entitled
under any suretyship laws in effect from time to time.
(b) In the event of default by Borrower and/or PRN, in payment of
the Guaranteed Obligations, or any part thereof, when such
indebtedness becomes due, either by its terms or as the result
of the exercise of any power to accelerate, Guarantor shall,
on demand and without presentment, protest, notice of
acceptance of this Guaranty, protest, further notice of
nonpayment or of dishonor or of default or nonperformance, or
notice of acceleration or of intent to accelerate, or any
other notice whatsoever, make payment in respect of or fully
perform, as the case may be, the Guaranteed Obligations.
Further, it shall not be necessary for KCIT, in order to
enforce such payment by Guarantor, first to institute suit or
pursue or exhaust any rights or remedies against Borrower, PRN
or others liable on such indebtedness, or to enforce any
rights against any security that shall ever have been given to
secure such indebtedness, or to join Borrower, PRN or any
others liable for the payment of the Guaranteed Obligations or
any part thereof in any action to enforce this Guaranty, or to
resort to any other means of obtaining payment or performance
of the Guaranteed Obligations.
(c) Suit may be brought or demand may be made against all parties
who have signed this Guaranty or any other guaranty covering
all or any part of the Guaranteed
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Obligations, or against any one or more of them, separately or
together, without impairing the rights of KCIT against any
party hereto. At any time that KCIT is entitled to exercise
its rights or remedies hereunder, it may in its discretion
elect to demand payment.
3. CERTAIN AGREEMENTS AND WAIVERS BY GUARANTOR.
(a) Guarantor hereby agrees that neither KCIT's rights or remedies
nor Guarantor's obligations under the terms of this Guaranty
shall be released, diminished, impaired, reduced or affected
by any one or more of the following events, actions, facts, or
circumstances, and the liability of Guarantor under this
Guaranty shall be absolute and unconditional irrespective of:
(i) any limitation of liability or recourse in any
other document relating to the Guaranteed
Obligations or arising under any law;
(ii) the taking or accepting of any other security or
guaranty for any or all of the Guaranteed
Obligations;
(iii) any release, surrender, abandonment, exchange,
alteration, sale or other disposition,
subordination, deterioration, waste, failure to
protect or preserve, impairment, or loss of, or
any failure to create or perfect any lien or
security interest with respect to, or any other
dealings with, any collateral or security at any
time existing or purported, believed or expected
to exist in connection with any or all of the
Guaranteed Obligations;
(iv) whether express or by operation of law, any
partial release of the liability of Guarantor
hereunder, or if one or more other guaranties are
now or hereafter obtained by KCIT covering all or
any part of the Guaranteed Obligations, any
complete or partial release of any one or more of
such guarantors under any such other guaranty, or
any complete or partial release of Borrower, PRN
or any other party liable, directly or
indirectly, for the payment or performance of any
or all of the Guaranteed Obligations;
(v) the insolvency, bankruptcy, disability,
dissolution, liquidation, termination,
receivership, reorganization, merger,
consolidation, change of form, structure or
ownership, sale of all assets, or lack of
corporate, partnership or other power of
Borrower, PRN or any other party at any time
liable for the payment of any or all of the
Guaranteed Obligations;
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(vi) either with or without notice to or consent of
Guarantor: any renewal, extension, modification
or rearrangement of the terms of any or all of
the Guaranteed Obligations (including the
Guaranteed Notes), including, without limitation,
material alterations of the terms of payment
(including changes in maturity date(s) and
interest rate(s)) or performance or any other
terms thereof, or any waiver, termination, or
release of, or consent to departure from, the
Guaranteed Notes or any other guaranty of any or
all of the Guaranteed Obligations, or any
adjustment, indulgence, forbearance, or
compromise that may be granted from time to time
by KCIT to Borrower, PRN, Guarantor, and/or any
other party at any time liable for the payment of
any or all of the Guaranteed Obligations;
(vii) any neglect, lack of diligence, delay, omission,
failure, or refusal of KCIT to (a) take or
prosecute (or in taking or prosecuting) any
action for the collection or enforcement of any
of the Guaranteed Obligations, or (b) foreclose
or take or prosecute any action to foreclose (or
in foreclosing or taking or prosecuting any
action to foreclose) upon any security therefor,
or (c) exercise (or in exercising) any other
right or power with respect to any security
therefor, or (d) take or prosecute (or in taking
or prosecuting) any action in connection with any
document relating to the Guaranteed Obligations,
(viii) any failure to sell or otherwise dispose of in a
commercially reasonable manner any collateral
securing any or all of the Guaranteed
Obligations.
(ix) any failure of KCIT to notify Guarantor of any
creation, renewal, extension, rearrangement,
modification, supplement, or assignment of the
Guaranteed Obligations or any part thereof, or of
the Guaranteed Notes, or of any release of or
change in any security or of any other action
taken or refrained from being taken by KCIT
against Borrower, PRN or any security, it being
understood that KCIT shall not be required to
give Guarantor any notice of any kind under any
circumstances with respect to or in connection
with the Guaranteed Obligations, and any and all
rights to notice that Guarantor may have
otherwise had being hereby waived by Guarantor;
(x) KCIT being required to refund any payment by
Borrower to Borrower or by PRN to PRN, as the
case may be, or any other party liable for the
payment of any or all of the Guaranteed
Obligations;
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(xi) the existence of any claim, set-off, or other
right that Guarantor may at any time have against
Borrower or PRN whether or not arising in
connection with this Guaranty or the Guaranteed
Notes (provided, that nothing contained herein
shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim); or
(xii) the unenforceability of all or any part of the
Guaranteed Obligations against Borrower or PRN,
whether because the Guaranteed Obligations exceed
the amount permitted by law or violate any usury
law, or because the act of creating the
Guaranteed Obligations, or any part thereof, is
ultra vires, or because the officers or persons
creating same acted in excess of their authority,
or because of a lack of validity or
enforceability of or defect or deficiency in the
Guaranteed Notes, or because of the subordination
of, or moratorium on, payments due and owing
under the Guaranteed Notes at such times as the
same would otherwise become due and owing under
the Guaranteed Notes but for such subordination
or moratorium, regardless of the party or
parties, including, without limitation, Congress
Financial Corporation, intended to be benefited
by such subordination or moratorium or because
Borrower's or PRN's obligation ceases to exist by
operation of law, or because of any other reason
or circumstance, it being agreed that Guarantor
shall remain liable hereon regardless of whether
Borrower, PRN or any other person be found not
liable on the Guaranteed Obligations, or any part
thereof, for any reason (and regardless of any
joinder of Borrower, PRN or any other party in
any action to obtain payment of any or all of the
Guaranteed Obligations); provided, however, that
if any part of the Guaranteed Obligations is not
enforceable against Borrower or PRN, as the case
may be, because of the proper exercise of any
right of set-off against the Guaranteed Notes
pursuant to the terms of the Acquisition
Agreement, that such part of the Guaranteed
Obligations shall not be enforceable against
Guarantor.
(b) In the event any payment by Borrower, PRN or any other party
to KCIT is held to constitute a preference, fraudulent
transfer or other voidable payment under any bankruptcy,
insolvency or similar law, or if for any other reason KCIT is
required to refund such payment or pay the amount thereof to
any other party, such payment by Borrower, PRN or any other
party to KCIT shall not constitute a release of Guarantor from
any liability hereunder, and this Guaranty shall continue to
be effective or shall be reinstated (notwithstanding any prior
release or discharge by KCIT of this Guaranty or of
Guarantor), as the case may be, with respect to, and this
Guaranty shall apply to, any and all amounts so refunded by
KCIT or paid by KCIT to another party, together with any
interest paid by KCIT and any attorneys' fees, costs and
expenses paid or incurred by KCIT in
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connection with any such event (all of which amounts shall
constitute part of the Guaranteed Obligations). It is the
intent of Guarantor and KCIT that the obligations and
liabilities of Guarantor hereunder are absolute and
unconditional under any and all circumstances and that until
the Guaranteed Obligations are fully and finally paid, and not
subject to refund or disgorgement, the obligations and
liabilities of Guarantor hereunder shall not be discharged or
released, in whole or in part, by any act or occurrence that
might, but for the provisions of this Guaranty, be deemed a
legal or equitable discharge or release of a guarantor. KCIT
shall be entitled to continue to hold this Guaranty in its
possession for a period of one year from the date the
Guaranteed Obligations are paid and performed in full and for
so long thereafter as may be necessary to enforce any
obligation of Guarantor hereunder and/or to exercise any right
or remedy of KCIT hereunder.
(c) If acceleration of the time for payment of any amount payable
by Borrower and/or PRN under the Guaranteed Notes is stayed or
delayed by any law or tribunal, all such amounts shall
nonetheless be payable by Guarantor on demand by KCIT.
4. OTHER LIABILITY. If Guarantor becomes liable for any indebtedness
owing by Borrower or PRN to KCIT other than under this Guaranty, such
liability shall not be in any manner impaired or affected hereby, and
the rights of KCIT hereunder shall be cumulative of any and all other
rights that KCIT may have against Guarantor. If Borrower or PRN is or
becomes indebted to KCIT for any indebtedness other than or in excess
of the Indebtedness for which Guarantor is liable under this Guaranty,
any payment received or recovery realized upon any indebtedness of
Borrower or PRN to KCIT may, except to the extent paid by Guarantor on
the Indebtedness for which Guarantor is liable under this Guaranty or
specifically required by law or agreement of KCIT to be applied to the
Indebtedness for which Guarantor is liable under this Guaranty, in
KCIT's sole discretion, be applied upon indebtedness of Borrower or
PRN to KCIT other than the Indebtedness for which Guarantor is liable
under this Guaranty.
5. KCIT ASSIGNS. This Guaranty is for the benefit of KCIT and KCIT's
successors and assigns, and in the event of a permitted assignment of
the Guaranteed Obligations, or any part thereof, the rights and
benefits hereunder, to the extent applicable to the Guaranteed
Obligations so assigned, may be transferred with such Guaranteed
Obligations. Guarantor waives notice of any transfer or assignment of
the Guaranteed Obligations, or any part thereof, and agrees that
failure to give notice will not affect the liabilities of Guarantor
hereunder.
6. BINDING EFFECT. This Guaranty is binding not only on Guarantor, but
also on Guarantor's successors and assigns. Words importing persons
herein shall include firms, associations, partnerships (including
limited partnerships), joint ventures, trusts,
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corporations and other legal entities, including public or governmental
bodies, agencies or instrumentalities, as well as natural persons.
7. GOVERNING LAW. This Guaranty, and its validity, enforcement, and
interpretation, shall for all purposes by governed by and construed in
accordance with the laws of the State of Delaware and applicable
United States federal law, and is intended to be performed in
accordance with, and only to the extent permitted by, such laws. All
obligations of Guarantor hereunder are payable and performable at the
place or places where the Guaranteed Obligations are payable and
performable.
8. INVALIDITY OF CERTAIN PROVISIONS. If any provision of this Guaranty
or the application thereof to any person or circumstance shall, for
any reason and to any extent, be judicially declared to be invalid or
unenforceable, neither the remaining provisions of this Guaranty nor
the application of such provision to any other Person or circumstance
shall be affected thereby, and the remaining provisions of this
Guaranty, or the applicability of such provision to other Persons or
circumstances, as applicable, shall remain in effect and be
enforceable to the maximum extent permitted by applicable law.
9. ATTORNEYS' FEES AND COSTS OF COLLECTION. Guarantor shall pay on
demand all reasonable attorneys' fees and all other costs and expenses
incurred by KCIT in the enforcement of or preservation of KCIT's
rights under this Guaranty. Guarantor agrees to pay interest on any
expenses or other sums due to KCIT under this Section 9 that are not
paid when due, at a rate per annum equal to the lesser of (i) the
maximum rate of interest permitted by applicable law, or (ii) the
Default Rate (as defined in the Guaranteed Notes). Guarantor's
obligations and liabilities under this Section 9 shall survive any
payment or discharge in full of the Guaranteed Obligations.
10. PAYMENTS. All sums payable under this Guaranty shall be paid in
lawful money of the United States of America that at the time of
payment is legal tender for the payment of public and private debts.
11. CONTROLLING AGREEMENT. It is not the intention of KCIT or Guarantor
to obligate Guarantor to pay interest in excess of that lawfully
permitted to be paid by Guarantor under applicable law. Should it be
determined that any portion of the Guaranteed Obligations or any other
amount payable by Guarantor under this Guaranty constitutes interest
in excess of the maximum amount of interest that Guarantor, in
Guarantor's capacity as guarantor, may lawfully be required to pay
under applicable law, the obligation of Guarantor to pay such interest
shall automatically be limited to the payment thereof in the maximum
amount so permitted under applicable law. The provisions of this
Section 11 shall override and control all other provisions of this
Guaranty and of any other agreement between Guarantor and KCIT.
12. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF GUARANTOR. Guarantor
hereby represents, warrants, and covenants that (a) after giving
effect to this Guaranty,
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Guarantor is solvent, and does not intend to incur or believe that it
will incur debts that will be beyond its ability to pay as such debts
mature; (b) KCIT has no duty at any time to investigate or inform
Guarantor of the financial or business condition or affairs of
Borrower or PRN or any change therein, and Guarantor will keep itself
fully appraised of Borrower's and PRN's financial and business
condition; (c) Guarantor acknowledges and agrees that Guarantor may be
required to pay and perform the Guaranteed Obligations in full without
assistance or support from Borrower, PRN or any other party; and (d)
Guarantor has read and fully understand the provisions contained in
the Guaranteed Notes. Guarantor's representations, warranties and
covenants are a material inducement to KCIT to make the Loan and
accept the Guaranteed Notes and shall survive the execution hereof and
any bankruptcy, foreclosure, transfer of security or other event
affecting Borrower, PRN, Guarantor, any other party, or any security
for all or any part of the Guaranteed Obligations.
13. NOTICES. Unless specifically provided otherwise, any notice for
purposes of this Guaranty or any other document relating hereto shall
be given in writing or by telex or by facsimile (fax) transmission and
shall be addressed or delivered to the respective addresses set forth
in this Guaranty, or to such other address as may have been previously
designated by the intended recipient by notice given in accordance
with this Section. If sent by prepaid, registered or certified mail
(return receipt requested), the notice shall be deemed effective when
deposited in a regularly maintained receptacle of the United States
Postal Service; if transmitted by telex, the notice shall be effective
when transmitted (answerback confirmed); and if transmitted by
facsimile or personal delivery, the notice shall be effective when
received. No notice of change of address shall be effective except
upon actual receipt. This Section 13 shall not be construed in any
way to affect or impair any waiver of notice or demand provided in
this Guaranty or in any other Loan Document or to require giving
notice or demand to or upon any Person in any situation or for any
reason.
14. CUMULATIVE RIGHTS. The exercise of KCIT of any right or remedy
hereunder or under the Guaranteed Notes, or at law or in equity, shall
not preclude the concurrent or subsequent exercise of any other right
or remedy. KCIT shall have all rights, remedies and recourses
afforded to KCIT by reason of this Guaranty, the Guaranteed Notes, or
by law, equity or otherwise, and the same (a) shall be cumulative and
concurrent, (b) may be pursued separately, successively or
concurrently against Guarantor or others obligated for the Guaranteed
Obligations, or any part thereof, or against any one or more of them,
or against any security or otherwise, at the sole discretion of KCIT,
(c) may be exercised as often as occasion therefor shall arise, it
being agreed by Guarantor that the exercise of, discontinuance of the
exercise of or failure to exercise any of such rights, remedies, or
recourses shall in no event be construed as a waiver or release
thereof or of any other right, remedy, or recourse, and (d) are
intended to be, and shall be, non-exclusive. No waiver of any
default on the part of Guarantor or of any breach of any of the
provisions of this Guaranty or of any other document shall be
considered a waiver of any other or subsequent default or breach, and
no delay or omission in exercising or
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enforcing the rights and powers granted herein or in any other
document shall be construed as a waiver of such rights and powers, and
no exercise or enforcement of any rights or powers hereunder or under
any other document shall be held to exhaust such rights and powers,
and every such right and power may be exercised from time to time. The
granting of any consent, approval or waiver by KCIT shall be limited
to the specific instance and purpose therefor and shall not constitute
consent or approval in any other instance or for any other purpose.
No notice to or demand on Guarantor in any case shall of itself
entitle Guarantor to any other or further notice or demand in similar
or other circumstances. No provision of this Guaranty or any right,
remedy or recourse of KCIT with respect hereto, or any default or
breach, can be waived, nor can this Guaranty or Guarantor be released
or discharged in any way or to any extent, except specifically in each
case by a writing intended for that purpose (and which refers
specifically to this Guaranty) executed, and delivered to Guarantor,
by KCIT.
15. TERM OF GUARANTY. This Guaranty shall continue in effect until all
the Guaranteed Obligations are fully and finally paid, and discharged,
except that, and notwithstanding any return of this Guaranty to
Guarantor, this Guaranty shall continue in effect (i) with respect to
all obligations and liabilities of Guarantor under Section 9 of this
Guaranty, and (ii) as provided in Section 4(b) hereof.
16. FURTHER ASSURANCES. Guarantor at Guarantor's expense will promptly
execute and deliver to KCIT upon KCIT's request all such other and
further documents, agreements, and instruments in compliance with or
accomplishment of the agreements of Guarantor under this Guaranty.
17. NO FIDUCIARY RELATIONSHIP. The relationship between KCIT and
Guarantor is solely that of KCIT and guarantor. KCIT has no fiduciary
or other special relationship with or duty to Guarantor and none is
created hereby.
18. INTERPRETATION. The term "KCIT" shall be deemed to include any
permitted subsequent holder(s) of the Guaranteed Notes. Whenever the
context of any provisions hereof shall require it, words in the
singular shall include the plural, words in the plural shall include
the singular, and pronouns of any gender shall include the other
genders. Captions and headings herein are for convenience only and
shall not affect the construction of the document. All references in
this Guaranty to Schedules, Articles, Sections, Subsections,
paragraphs and subparagraphs refer to the respective subdivisions of
this Guaranty, unless such reference specifically identifies another
document. The terms "herein," "hereof," "hereto," "hereunder" and
similar terms refer to this Guaranty and not to any particular section
or subsection of this Guaranty. The terms "include" and "including"
shall be interpreted as if followed by the words "without limitation."
All references in this Guaranty to sums denominated in dollars or with
the symbol "$" refer to the lawful currency of the United States of
America, unless such reference specifically identifies another
currency.
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19. TIME OF ESSENCE. Time shall be of the essence in this Guaranty with
respect to all of Guarantor's obligations hereunder.
20. ENTIRE AGREEMENT. This Guaranty embodies the entire agreement between
KCIT and Guarantor with respect to the guaranty by Guarantor of the
Guaranteed Obligations. This Guaranty supersedes all prior agreements
and understandings, if any, with respect to the guaranty by Guarantor
of the Guaranteed Obligations. No condition or conditions precedent
to the effectiveness of this Guaranty exist. This Guaranty shall be
effective upon execution by Guarantor and delivery to KCIT.
IN WITNESS WHEREOF, Guarantor duly executed this Guaranty as of the
30th day of September, 1994.
GUARANTOR:
PRN HOLDINGS, INC.
By: /s/ JAY. M. KAPLAN
Printed Name: Jay M. Kaplan
Title: Senior Vice President
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