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EXHIBIT 10.4
GUARANTY
THIS GUARANTY, dated as of 1st day of September, 1998 (as amended from
time to time, the "Guaranty"), is entered into by ALFRED E. MANN, an individual
("Guarantor"), in favor of MINIMED INC., a Delaware corporation ("Beneficiary").
R E C I T A L S
A. Beneficiary intends to enter into a Master Agreement (the "Master
Agreement") with Medical Research Group, LLC , a California limited liability
company (the "Obligor") providing for Beneficiary and Obligor to execute an
Agreement Re Implantable Pump Business, an Implantable Pump License and
Distribution Agreement and a Glucose Sensor Option Agreement, all relating to
the transfer of Beneficiary's business activities relating to implantable pump
systems to Obligor (the "Implantable Pump Documents").
B. Guarantor is the owner of a substantial equity interest in Obligor
and is entering into this Guaranty at the request of the Obligor as an
inducement to Beneficiary to enter into the Master Agreement and the Implantable
Pump Documents.
A G R E E M E N T
1. Guaranty. Guarantor unconditionally guaranties the performance in
full of all of the following (the "Obligations"):
1.1 the obligations of Obligor pursuant to the representations and
warranties set forth in the last sentence of Section 16.1.3 of the
Implantable Pump License and Distribution Agreement and Section 13.3 of
the Glucose Sensor Option Agreement, as well as the obligations of Obligor
to compensate Beneficiary for any loss, cost, liability, obligation or
expense (including reasonable attorney's fees) arising out of or relating
to the inaccuracy of those representations and warranties, and
1.2 the payment of all amounts and the performance of all
obligations of Obligor under and in connection with the Lease of
facilities to be entered into by Obligor with Beneficiary pursuant to
Section 5 of the Agreement Re Implantable Pump Business concurrently with
the execution and delivery of that Agreement (the "Lease"), and
1.3 the payment of all losses, costs, liabilities, obligations and
expenses (including court costs and reasonable attorneys' fees) arising
out of or relating to the failure of the Obligor to perform any such
obligations in 1.1 and 1.2, including interest that would have accrued on
any amount referred to in 1.1, 1.2 or this 1.3. but for the commencement
of a case under Title 11 of the United States Code or any successor
statute (the "Bankruptcy Code") or any other law governing insolvency,
bankruptcy, reorganization, liquidation or similar proceeding.
Beneficiary hereby accepts this Guaranty, and this Guaranty shall
constitute notice to Guarantor of such acceptance.
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All payments under this Guaranty shall be made free and clear of any
and all deductions, withholdings and setoffs. All references to the Obligor in
this Guarantee shall include (a) Medical Research Group, LLC, whether acting on
behalf of itself or any estate created by the commencement of a case under Title
11 of the United Sates Code or any successor statute (the "Bankruptcy Code") or
any other insolvency, bankruptcy, reorganization or liquidation proceeding and
(b) any trustee under the Bankruptcy Code, liquidator, sequestrator or receivor
of Medical Research Group, LLC or any other Obligor referred to in this sentence
of any or their respective properties and (c) any similar person appointed
pursuant to any law generally governing insolvency, bankruptcy, reorganization,
liquidation or like proceeding and (d) any other person or entity who becomes
obligated to perform any of the Obligations for any reason, including without
limitation, assignment or assumption of the Obligations or any merger or other
reorganization or dissolution of Medical Research Group, LLC.
2. Nature of Guaranty. This is an unconditional guaranty of the
Obligations, including any and all Obligations which are modified, renewed,
comprised or restructured from time to time. This Guaranty may not be revoked
and shall not otherwise terminate unless and until all of the Obligations have
been indefeasibly paid and performed in full. The parties acknowledge and agree
that the liability of Guarantor hereunder is independent of and not in
consideration of or contingent upon the liability of the Obligor or any other
guarantor and a separate action or actions may be brought and prosecuted against
any guarantor, whether or not any action is brought or prosecuted against the
Obligor or any guarantor or whether the Obligor or any other guarantor is joined
in any such action or actions. To the extent that performance of this Guaranty
or the Obligations requires the payment of money, this Guaranty shall be
construed as a guaranty of payment (and not merely of collection). By this
Guaranty the Guarantor guaranties the performance and payment of the Obligations
without regard to:
2.1 the legality, validity or enforceability of the Master
Agreement, the Implantable Pump Documents or the Lease or any other
document entered into in connection therewith, any of the Obligations or
the obligations of Guarantor under this Guaranty;
2.2 any defense (other than performance), set-off or counterclaim
that may at any time be available to the Obligor or Guarantor against the
Beneficiary; or
2.3 any other circumstance whatsoever (with or without notice to or
knowledge of Guarantor or the Obligor), whether or not similar to any of
the foregoing, that constitutes, or might be construed to constitute, an
equitable or legal discharge of the Obligor or Guarantor, in bankruptcy or
in any other instance.
Any payment by the Obligor or any other guarantor or other circumstance
that operates to toll any statute of limitations applicable to such party shall
also operate to toll the statute of limitations applicable to the Guarantor.
When making any demand hereunder (including by commencement or continuance of
any legal proceeding), the Beneficiary may, but shall be under no obligation to,
make a similar demand on the Obligor and all or any of any other guarantors, and
any failure by the Beneficiary to make any such demand shall not relieve
Guarantor of his obligations hereunder.
Beneficiary may bring and prosecute a separate action against Guarantor
to enforce its liabilities under this Guaranty, whether or not any action is
brought against the
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Obligor or any other person and whether or not the Obligor or any other person
is joined in any such action or actions. Nothing shall prohibit Beneficiary from
exercising its rights against Guarantor, the Obligor, the security, if any, for
the Obligations, and any other persons simultaneously, jointly and/or severally.
Guarantor shall be bound by each and every ruling, order and judgment obtained
by Beneficiary against the Obligor in respect of the Obligations, whether or not
Guarantor is a party to the action or proceeding in which such ruling or
judgment is issued or rendered.
3. Authorization. Guarantor authorizes Beneficiary, without notice to
or further assent by Guarantor, and without affecting Guarantor's liability
hereunder (regardless of whether any subrogation, reimbursement, indemnification
or other similar right that Guarantor may have or any other right or remedy of
Guarantor is extinguished or impaired as a result), from time to time to:
3.1 permit the Obligor to increase or create Obligations, or
terminate, release, compromise, subordinate, extend, accelerate or
otherwise change the Obligations or any part thereof, or otherwise amend
the terms and conditions of the Master Agreement, the Implantable Pump
Documents or the Lease or any related document or any provision thereof;
3.2 declare a default in respect of any of the Obligations and
exercise in such manner and order as it elects in its sole discretion,
fail to exercise, waive, suspend, terminate or suffer expiration of, any
of the remedies or rights of the Beneficiary against the Obligor or
Guarantor in respect of any Obligations;
3.3 foreclose or enforce or realize upon (pursuant to judicial
foreclosure, power of sale or any other means) any security for any of the
Obligations even though (a) recourse may not thereafter be had against the
Obligor for any deficiency or (b) Beneficiary fails to pursue any such
recourse which might otherwise be available or by way of deficiency
judgment following judicial foreclosure or otherwise;
3.4 release or settle with the Obligor and/or Guarantor in respect
of this Guaranty or the Obligations;
3.5 accept partial payments on the Obligations and apply any and all
payments or recoveries from the Obligor to such of the Obligations as the
Beneficiary may elect in its sole discretion, whether or not such
Obligations are secured or guaranteed;
3.6 refund at any time, at Beneficiary's sole discretion, any
payments or recoveries received by Beneficiary in respect of any
Obligations; and
3.7 otherwise deal with the Obligor or any other Guarantor as
Beneficiary may elect in its sole discretion.
4. Certain Waivers. Guarantor waives:
4.1 the right arising under California Civil Code Sections 2845 and
2849 or otherwise to require the Beneficiary to proceed against the
Obligor or any other guarantor, to proceed against or exhaust security for
the Obligations, or to pursue any other remedy in the Beneficiary's power
whatsoever and the right to have
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property of the Obligor or any other guarantor first applied to the
discharge of the Obligations or applied in any particular order;
4.2 all rights and benefits under Section 2809 of the California
Civil Code and any other provision of applicable law purporting to reduce
a guarantor's obligations in proportion to the obligation of the principal
or providing that the obligation of a surety or guarantor must neither be
larger nor in other respects more burdensome than that of the principal;
4.3 the benefit of any statute of limitations affecting the
Obligations or Guarantor's liability hereunder and of Section 359.5 of the
California Code of Civil Procedure;
4.4 any requirement of marshaling or any other principle of election
of remedies and all rights and defenses arising out of an election of
remedies by Beneficiary.
4.5 any right to assert against Beneficiary any defense (legal or
equitable), set-off, counterclaim and other right that Guarantor may now
or any time hereafter have against the Obligor or any other Obligor;
4.6 presentment, demand for payment or performance (including
diligence in making demands hereunder), notice of dishonor or
nonperformance, protest, acceptance and notice of acceptance of this
Guaranty, and all other notices of any kind, including (i) notice of the
existence, creation or incurrence of new or additional Obligations, (ii)
notice of any action taken or omitted by Beneficiary in reliance hereon,
(iii) notice of any default by the Obligor in the performance or payment
of any of the Obligations (including without limitation under the
circumstances contemplated by California Civil Code Section 2808 when such
notice might otherwise be required), notice of any default by Guarantor in
the performance or payment of obligations under this Guarantee and notice
of any other default by the Obligor or Guarantor whatsoever, (iv) notice
that any portion of the Obligations is due, (iv) notice of any action
against the Obligor or any other Obligor, or any enforcement or other
action with respect to any Collateral, or the assertion of any right of
Beneficiary hereunder;
4.7 all defenses that at any time may be available to Guarantor by
virtue of any valuation, stay, moratorium or other law now or hereafter in
effect;
4.8 any rights, defenses and other benefits Guarantor may have under
Section 2810 of the California Civil Code or any other provision of
applicable law purporting to limit or eliminate the liability of Guarantor
if the Obligor is not liable (as a result of physical disability or
otherwise) at the time of the execution of the Master Agreement, the
Implantable Pump Documents, the Lease or this Guaranty and/or the
incurrence of any other Obligations, or the liability of the Obligor
thereafter ceases for any reason other than performance and payment in
full of the Obligations.
4.9 any rights, defenses and other benefits Guarantor may have under
Section 2839 of the California Civil Code or any other provision of
applicable law purporting to exonerate Guarantor for anything other than
performance or payment in full of all of the Obligations.
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4.10 without limiting the generality of the foregoing or any other
provision hereof, all rights and benefits under California Civil Code
Sections 2810, 2819, 2839, 2845, 2848, 2849, 2850 or 3433.
Without limiting the generality of any other provision of this
Guaranty, Guarantor waives all rights and defenses arising out of an election of
remedies even though that election of remedies, such as nonjudicial foreclosure
with respect to security for the Obligations or any of them, has destroyed
Guarantor's rights of subrogation and reimbursement against the Obligor by
operation of Section 580d of the Code of Civil Procedure or otherwise.
5. Subrogation; Certain Agreements.
5.1 GUARANTOR WAIVES ANY AND ALL RIGHTS OF SUBROGATION, INDEMNITY,
CONTRIBUTION OR REIMBURSEMENT, AND ANY AND ALL BENEFITS OF AND RIGHTS TO
ENFORCE ANY POWER, RIGHT OR REMEDY THAT BENEFICIARY MAY NOW OR HEREAFTER
HAVE IN RESPECT OF THE OBLIGATIONS AGAINST THE OBLIGOR AND ANY AND ALL
OTHER RIGHTS AND CLAIMS (AS DEFINED IN THE BANKRUPTCY CODE) GUARANTOR MAY
HAVE AGAINST THE OBLIGOR, UNDER APPLICABLE LAW OR OTHERWISE, AT LAW OR IN
EQUITY, BY REASON OF ANY PERFORMANCE OR ANY PAYMENT HEREUNDER, UNLESS AND
UNTIL THE OBLIGATIONS SHALL HAVE BEEN PERFORMED OR PAID IN FULL. Without
limitation, Guarantor shall exercise no voting rights, shall file no
claim, and shall not participate or appear in any bankruptcy or insolvency
case involving the Obligor with respect to the Obligations unless and
until all the Obligations shall have been performed or paid in full. If,
notwithstanding the foregoing, any amount shall be paid to Guarantor on
account of any such rights at any time, such amount shall be held in trust
for the benefit of the Beneficiary and shall forthwith be paid to the
Beneficiary to be applied to the Obligations, whether matured, unmatured,
absolute or contingent.
5.2 Guarantor assumes the responsibility for being and keeping
himself informed of the financial condition of the Obligor and any other
guarantor and of all other circumstances bearing upon the risk of
nonpayment of the Obligations that diligent inquiry would reveal, and
agrees that Beneficiary shall have no duty to advise Guarantor of
information regarding such condition or any such circumstances.
6. Bankruptcy No Discharge.
6.1 Without limiting Section 2, this Guaranty shall not be
discharged or otherwise affected by any bankruptcy, reorganization or
similar proceeding commenced by or against the Obligor or any other
guarantor, including (i) any discharge of, or bar or stay against
enforcing, all or any part of the Obligations in or as a result of any
such proceeding, whether or not assented to by Beneficiary, (ii) any
disallowance of all or any portion of Beneficiary's claim for repayment of
the Obligations, (iii) any use of cash or other collateral in any such
proceeding, (iv) any agreement or stipulation as to adequate protection in
any such proceeding, (v) any failure by Beneficiary to file or enforce a
claim against the Obligor or any other guarantor or his estate in any
bankruptcy or reorganization case, (vi) any amendment, modification, stay
or cure of the Beneficiary's rights that may occur in any such proceeding,
(vii) any election by Beneficiary under Section 1111(b)(2) of the
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Bankruptcy Code, or (viii) any borrowing or grant of a lien under Section
364 of the Bankruptcy Code. Guarantor understands and acknowledges that by
virtue of this Guaranty, it has specifically assumed any and all risks of
any such proceeding with respect to the Obligor and any other guarantor.
6.2 Notwithstanding anything to the contrary herein contained, this
Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any performance or payment, or any part thereof, of any
or all of the Obligations is rescinded, invalidated, declared to be
fraudulent or preferential or otherwise required to be restored or
returned by Beneficiary in connection with any bankruptcy, reorganization
or similar proceeding involving the Obligor, Guarantor or otherwise, if
the proceeds of any collateral are required to be returned by Beneficiary
under any such circumstances, or if Beneficiary elects to return any such
payment or proceeds or any part thereof in its sole discretion, all as
though such payment had not been made or such proceeds not been received.
Without limiting the generality of the foregoing, if prior to any such
rescission, invalidation, declaration, restoration or return, this
Guaranty shall have been canceled or surrendered, this Guaranty shall be
reinstated in full force and effect, and such prior cancellation or
surrender shall not diminish, discharge or otherwise affect the
obligations of Guarantor in respect of the amount of the affected payment
or application of proceeds (or such lien or collateral).
7. Subordination.
7.1 Guarantor hereby absolutely subordinates, both in right of
payment and in time of payment, any and all present or future obligations
and liabilities of the Obligor to Guarantor ("Subordinated Debt") to the
prior performance and payment in full of the Obligations, whether or not
such Subordinated Debt constitutes or arises out of any subrogation,
reimbursement, contribution, indemnity or similar right attributable to
this Guaranty. If, whether or not at Beneficiary's request, Guarantor
shall receive, prior to performance or payment in full of all Obligations,
payment of any sum from the Obligor upon any Subordinated Debt, any such
sum shall be received by Guarantor as trustee for Beneficiary and shall
forthwith be paid over to Beneficiary on account of the Obligations,
without reducing or affecting in any manner the liability of Guarantor
under this Guaranty.
7.2 Guarantor shall file in any bankruptcy or reorganization or
similar proceeding in which the filing of claims is required by any
provision of applicable law, all claims that Guarantor may have against
the Obligor relating to any Subordinated Debt. If Guarantor does not file
any such claim, Beneficiary (or its nominee) as attorney-in-fact for
Guarantor is hereby authorized to do so in the name of Guarantor.
Guarantor agrees that, in connection with any such proceeding, he shall
not contest or oppose the treatment of claims of the Beneficiary in any
plan of reorganization or otherwise and he shall vote any claims that
exist by virtue of this Guaranty or the Subordinated Debt in connection
with any plans of reorganization or otherwise, as may be requested by the
Beneficiary.
7.3 Guarantor hereby grants Beneficiary a power of attorney for the
purposes set forth in this Section 7. Such power of attorney is coupled
with an interest and cannot be revoked.
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8. Representations and Warranties. Guarantor makes the following
representations and warranties, all of which shall survive until termination of
this Guaranty pursuant to Section 2.
8.1 Binding Effect, No Conflict, Etc. This Guaranty has been duly
executed and delivered by Guarantor and is the legal, valid and binding
obligation of Guarantor, enforceable against him in accordance with its
terms, except as enforcement may be limited by equitable principles and by
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to creditors' rights generally. The execution, delivery and
performance by Guarantor of this Guaranty and the consummation of the
transactions contemplated hereby, do not and will not conflict with,
result in a breach of or constitute (or, with the giving of notice or
lapse of time, or both, would constitute) a default under, or require the
approval or consent of any person or entity (including any governmental
entity) pursuant to, any contractual obligation of the Guarantor or
violate any provision of applicable law binding on the Guarantor. No
approval, consent, permit or other authorization is required by any
governmental agency or court in connection with the execution, delivery
and performance by the Guarantor of this Guaranty or the consummation of
transactions contemplated hereby or to ensure the legality, validity or
enforceability hereof or thereof.
8.2 Financial Benefit. Guarantor hereby acknowledges and warrants
that he has derived or expects to derive a financial advantage from the
execution and delivery of the Master Agreement, the Implantable Pump
Documents and the Lease and that the execution and delivery of this
Guaranty is intended to, and does, constitute an inducement to Beneficiary
to enter into the those Documents.
8.3 Review of Documents; Understanding with Respect to Waivers.
Guarantor hereby acknowledges that he has copies of and is fully familiar
with the Master Agreement, the Implantable Pump Documents and the Lease
and each other document entered into by Obligor in connection therewith.
Guarantor warrants and agrees that each waiver set forth in this Guaranty
is made with Guarantor's full knowledge of its significance and
consequences and after opportunity to consult with counsel of its own
choosing and that, under the circumstances, each such waiver is reasonable
and should not be found contrary to public policy or law.
9. Expenses. Guarantor shall pay to the Beneficiary any and all costs
and expenses (including reasonable attorneys' fees and expenses), that
Beneficiary may incur in connection with the exercise or enforcement of any of
the rights, powers or remedies of Beneficiary under this Guaranty or applicable
law. All such amounts and all other amounts payable hereunder shall be payable
on demand, together with interest at a rate equal to the lesser of (i) the
Citibank N.A. prime rate from time to time in effect plus 1% (based on a year of
365 or 366 days, as the case may be), or (ii) the maximum rate allowed by
applicable law, from and including the due date to and excluding the date of
payment.
10. Amendments and Other Modifications. No amendment of any provision
of this Guaranty (including a waiver thereof or consent relating thereto) shall
be effective unless the same shall be in writing and signed by Beneficiary. Any
waiver or consent relating to any provision of this Guaranty shall be effective
only in the specific instance and for the specific purpose for which given. No
notice to or demand on Guarantor in any case shall entitle Guarantor to any
other or further notice or demand in similar or other circumstances.
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11. Cumulative Remedies; Failure or Delay. The rights and remedies
provided for under this Guaranty are cumulative and are not exclusive of any
rights and remedies that may be available to Beneficiary under applicable law or
otherwise. No failure or delay on the part of Beneficiary in the exercise of any
power, right or remedy under this Guaranty shall impair such power, right or
remedy or shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude other or further exercise
of such or any other power, right or remedy.
12. Notices, Etc. All notices and other communications under this
Guaranty shall be in writing and shall be personally delivered or sent by
prepaid courier, by overnight, registered or certified mail (postage prepaid),
or by telecopy or telegram, and shall be deemed given when received by the
intended recipient thereof. Unless otherwise specified in a notice given in
accordance with the foregoing provisions of this Section, all notices and other
communications shall be given to the parties hereto at their respective
addresses (or to their respective or telecopier numbers) indicated on Schedule
13.
13. Successors and Assigns. This Guaranty and each amendment hereof
shall be binding upon and, subject to the next sentence, inure to the benefit of
Guarantor, Beneficiary and their respective successors and assigns and the
executor, administrator or other personal representative of Guarantor and his
heirs and other successors as a result of his death. The benefit of this
Guaranty shall automatically pass with any assignment by Beneficiary of the
Obligations (or any portion thereof), to the extent of such assignment. In
connection with any assignment Beneficiary may disclose to any person or entity
all documents and information that Beneficiary has relating to Guarantor and
this Guaranty, whether furnished by Obligor, Guarantor or otherwise. Guarantor
further agrees that Beneficiary may disclose such documents and information to
the Obligor and any other guarantors of the Obligations.
14. Execution in Counterparts. This Guaranty may be executed in any
number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Guaranty.
15. Complete Agreement. This Guaranty, together with the schedule
hereto, is intended by the parties as the final expression of their agreement
regarding the subject matter hereof and as a complete and exclusive statement of
the terms and conditions of such agreement, superseding all prior discussions,
negotiations, understandings and agreements.
IN WITNESS WHEREOF, the parties hereto have duly executed this Guaranty
as of the date set forth above.
By: /s/ ALFRED E. MANN
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Alfred E. Mann
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