1
EXHIBIT 12.3
[FIRST UNION LOGO]
UNCONDITIONAL GUARANTY
January 12, 2000
Herth Management, Inc.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Individually and collectively "Borrower")
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Individually and collectively "Guarantor")
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Hereinafter referred to as "Bank")
To induce Bank to make, extend or renew loans, advances, credit or other
financial accommodations to or for the benefit of Borrower, and in consideration
of loans, advances, credit or other financial accommodations made, extended or
renewed to or for the benefit of Borrower, Guarantor hereby absolutely,
irrevocably and unconditionally guarantees to Bank and its successors, assigns
and affiliates the timely payment and performance of all liabilities and
obligations of Borrower to Bank and its affiliates, including, but not limited
to, all obligations under any notes, loan agreements, security agreements,
letters of credit, swap agreements (as defined in 11 U.S. Code ss. 101),
instruments, accounts receivable, contracts, drafts, leases, chattel paper,
indemnities, acceptances, repurchase agreements, overdrafts, and the Loan
Documents defined below, however and whenever incurred or evidenced, whether
primary, secondary, direct, indirect, absolute, contingent, due or to become
due, now existing or hereafter contracted or acquired, and all modifications,
extensions and renewals thereof, including without limitation all principal,
interest, charges, and costs and expenses incurred thereunder (including
attorneys' fees and other costs of collection incurred, regardless of whether
suit is commenced) (collectively, the "Guaranteed Obligations").
Guarantor further covenants and agrees:
GUARANTOR'S LIABILITY. This Guaranty is a continuing and unconditional guaranty
of payment and performance and not of collection. The parties to this Guaranty
are jointly and severally obligated hereunder. This Guaranty does not impose any
obligation on Bank to extend or continue to extend credit or otherwise deal with
Borrower at any subsequent time. This Guaranty shall continue to be effective or
be reinstated, as the case may be, if at any time any payment of the Guaranteed
Obligations is rescinded, avoided or for any other reason must be returned by
Bank, and the returned payment shall remain payable as part of the Guaranteed
Obligations, all as though such payment had not been made. Except to the extent
the provisions of this Guaranty give Bank additional rights, this Guaranty shall
not be deemed to supersede or replace any other guaranties given to Bank by
Guarantor, and the obligations guaranteed hereby shall be in addition to any
other obligations guaranteed by Guarantor pursuant to any other agreement of
guaranty given to Bank and other guaranties of the Guaranteed Obligations.
TERMINATION OF GUARANTY. Guarantor may terminate this Guaranty only by written
notice, delivered personally to or received by certified or registered United
States Mail by an authorized officer of Bank at the address for notices provided
herein. Such termination shall be effective with respect to Guaranteed
Obligations arising more than 15 days after the date such written notice is
received by said Bank officer. Guarantor may not terminate this Guaranty as to
Guaranteed Obligations (including any subsequent extensions, modifications or
compromises of the Guaranteed Obligations) then existing, or to
Page 1
2
Guaranteed Obligations arising subsequent to receipt by Bank of said notice if
such Guaranteed Obligations are a result of Bank's obligation to make advances
pursuant to a commitment entered into prior to expiration of the 15 day notice
period, or are a result of advances which are necessary for Bank to protect its
collateral or otherwise preserve its interests. Termination of this Guaranty by
any single Guarantor will not affect the existing and continuing obligations of
any other Guarantor hereunder.
CONSENT TO MODIFICATIONS. Guarantor consents and agrees that Bank may from time
to time, in its sole discretion, without affecting, impairing, lessening or
releasing the obligations of Guarantor hereunder: (a) extend or modify the time,
manner, place or terms of payment or performance and/or otherwise change or
modify the credit terms of the Guaranteed Obligations; (b) increase, renew, or
enter into a novation of the Guaranteed Obligations; (c) waive or consent to the
departure from terms of the Guaranteed Obligations; (d) permit any change in the
business or other dealings and relations of Borrower or any other guarantor with
Bank; (e) proceed against, exchange, release, realize upon, or otherwise deal
with in any manner any collateral that is or may be held by Bank in connection
with the Guaranteed Obligations or any liabilities or obligations of Guarantor;
and (f) proceed against, settle, release, or compromise with Borrower, any
insurance carrier, or any other person or entity liable as to any part of the
Guaranteed Obligations, and/or subordinate the payment of any part of the
Guaranteed Obligations to the payment of any other obligations, which may at any
time be due or owing to Bank; all in such manner and upon such terms as Bank may
deem appropriate; and without notice to or further consent from Guarantor. No
invalidity, irregularity, discharge or unenforceability of, or action or
omission by Bank relating to any part of the Guaranteed Obligations or any
security therefor shall affect or impair this Guaranty.
WAIVERS AND ACKNOWLEDGMENTS. Guarantor waives and releases the following rights,
demands, and defenses Guarantor may have with respect to Bank and collection of
the Guaranteed Obligations: (a) promptness and diligence in collection of any of
the Guaranteed Obligations from Borrower or any other person liable thereon, and
in foreclosure of any security interest and sale of any property serving as
collateral for the Guaranteed Obligations; (b) any law or statute that requires
that Bank make demand upon, assert claims against, or collect from Borrower or
other persons or entities, foreclose any security interest, sell collateral,
exhaust any remedies, or take any other action against Borrower or other persons
or entities prior to making demand upon, collecting from or taking action
against Guarantor with respect to the Guaranteed Obligations, including any such
rights Guarantor might otherwise have had under Va. Code ▇▇.▇▇. 49-25 and 49-26,
et seq., N.C.G.S. ▇▇.▇▇. 26-7, et seq., Tenn. Code ▇▇▇. ss. ▇▇-▇▇-▇▇▇, O.C.G.A.
ss. 10-7-24 and any successor statute and any other applicable law; (c) any law
or statute that requires that Borrower or any other person be joined in,
notified of or made part of any action against Guarantor; (d) that Bank
preserve, insure or perfect any security interest in collateral or sell or
dispose of collateral in a particular manner or at a particular time; (e) notice
of extensions, modifications, renewals, or novations of the Guaranteed
Obligations, of any new transactions or other relationships between Bank,
Borrower and/or any guarantor, and of changes in the financial condition of,
ownership of, or business structure of Borrower or any other guarantor; (f)
presentment, protest, notice of dishonor, notice of default, demand for payment,
notice of intention to accelerate maturity, notice of acceleration of maturity,
notice of sale, and all other notices of any kind whatsoever; (g) the right to
assert against Bank any defense (legal or equitable), set-off, counterclaim, or
claim that Guarantor may have at any time against Borrower or any other party
liable to Bank; (h) all defenses relating to invalidity, insufficiency,
unenforceability, enforcement, release or impairment of Bank's lien on any
collateral, of the Loan Documents, or of any other guaranties held by Bank; (i)
any claim or defense that acceleration of maturity of the Guaranteed Obligations
is stayed against Guarantor because of the stay of assertion or of acceleration
of claims against any other person or entity for any reason including the
bankruptcy or insolvency of that person or entity; and (j) the benefit of any
exemption claimed by Guarantor. Guarantor acknowledges and represents that
Guarantor has relied upon Guarantor's own due diligence in making an independent
appraisal of Borrower, Borrower's business affairs and financial condition, and
any collateral; Guarantor will continue to be responsible for making an
independent appraisal of such matters; and Guarantor has not relied upon and
will not hereafter rely upon Bank for information regarding Borrower or any
collateral.
Page 2
3
FINANCIAL CONDITION. Guarantor warrants, represents and covenants to Bank that
on and after the date hereof: (a) the fair saleable value of Guarantor's assets
exceeds its liabilities, Guarantor is meeting its current liabilities as they
mature, and Guarantor is and shall remain solvent; (b) all financial statements
of Guarantor furnished to Bank are correct and accurately reflect the financial
condition of Guarantor as of the respective dates thereof; (c) since the date of
such financial statements, there has not occurred a material adverse change in
the financial condition of Guarantor; (d) there are not now pending any court or
administrative proceedings or undischarged judgments against Guarantor, no
federal or state tax liens have been filed or threatened against Guarantor, and
Guarantor is not in default or claimed default under any agreement; and (e) at
such reasonable times as Bank requests, Guarantor will furnish Bank with such
other financial information as Bank may reasonably request.
INTEREST AND APPLICATION OF PAYMENTS. Regardless of any other provision of this
Guaranty or other Loan Documents, if for any reason the effective interest on
any of the Guaranteed Obligations should exceed the maximum lawful interest, the
effective interest shall be deemed reduced to and shall be such maximum lawful
interest, and any sums of interest which have been collected in excess of such
maximum lawful interest shall be applied as a credit against the unpaid
principal balance of the Guaranteed Obligations. Monies received from any source
by Bank for application toward payment of the Guaranteed Obligations may be
applied to such Guaranteed Obligations in any manner or order deemed appropriate
by Bank.
DEFAULT. If any of the following events occur, a default ("Default") under this
Guaranty shall exist: (a) failure of timely payment or performance of the
Guaranteed Obligations or a default under any Loan Document; (b) a breach of any
agreement or representation contained or referred to in the Guaranty, or any of
the Loan Documents, or contained in any other contract or agreement of Guarantor
with Bank or its affiliates, whether now existing or hereafter arising; and/or
(c) the death of, appointment of a guardian for, dissolution of, termination of
existence of, loss of good standing status by, appointment of a receiver for,
assignment for the benefit of creditors of, or the commencement of any
insolvency or bankruptcy proceeding by or against Guarantor or any general
partner of or the holder(s) of the majority ownership interests of Guarantor.
If a Default occurs, the Guaranteed Obligations shall be due immediately and
payable without notice, and, Bank may exercise any rights and remedies as
provided in this Guaranty and other Loan Documents, or as provided at law or
equity. Guarantor shall pay interest on the Guaranteed Obligations from such
Default at the highest rate of interest charged on any of the Guaranteed
Obligations.
ATTORNEYS' FEES AND OTHER COSTS OF COLLECTION. Guarantor shall pay all of Bank's
reasonable expenses incurred to enforce or collect any of the Guaranteed
Obligations, including, without limitation, reasonable arbitration, paralegals',
attorneys' and experts' fees and expenses, whether incurred without the
commencement of a suit, in any suit, arbitration, or administrative proceeding,
or in any appellate or bankruptcy proceeding.
SUBORDINATION OF OTHER DEBTS. Guarantor agrees: (a) to subordinate the
obligations now or hereafter owed by Borrower to Guarantor ("Subordinated Debt")
to any and all obligations of Borrower to Bank now or hereafter existing while
this Guaranty is in effect, provided however that Guarantor may receive
regularly scheduled principal and interest payments on the Subordinated Debt so
long as (i) all sums due and payable by Borrower to Bank have been paid in full
on or prior to such date, and (ii) no event or condition which constitutes or
which with notice or the lapse or time would constitute an event of default with
respect to the Guaranteed Obligations shall be continuing on or as of the
payment date; (b) Guarantor will either place a legend indicating such
subordination on every note, ledger page or other document evidencing any part
of the Subordinated Debt or deliver such documents to Bank; and (c) except as
permitted by this paragraph, Guarantor will not request or accept payment of or
any security for any part of the Subordinated Debt, and any proceeds of the
Subordinated Debt paid to Guarantor, through error or otherwise, shall
immediately be forwarded to Bank by Guarantor, properly endorsed to the order of
Bank, to apply to the Guaranteed Obligations.
Page 3
4
MISCELLANEOUS. ASSIGNMENT. This Guaranty and other Loan Documents shall inure
to the benefit of and be binding upon the parties and their respective heirs,
legal representatives, successors and assigns. Bank's interests in and rights
under this Guaranty and other Loan Documents are freely assignable, in whole or
in part by Bank. Any assignment shall not release Guarantor from the Guaranteed
Obligations. APPLICABLE LAW; CONFLICT BETWEEN DOCUMENTS. This Guaranty and other
Loan Documents shall be governed by and construed under the laws of the state
named in Bank's address shown above without regard to that state's conflict of
laws principles. If the terms of this Guaranty should conflict with the terms of
any commitment letter that survives closing, the terms of this Guaranty shall
control. GUARANTOR'S ACCOUNTS. Except as prohibited by law, Guarantor grants
Bank a security interest in all of Guarantor's accounts with Bank and its
affiliates. JURISDICTION. Guarantor irrevocably agrees to non-exclusive personal
jurisdiction in the state named in Bank's address shown above. SEVERABILITY. If
any provision of this Guaranty or of the other Loan Documents shall be
prohibited or invalid under applicable law, such provision shall be ineffective
but only to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of this Guaranty or
other Loan Documents. NOTICES. Any notices to Guarantor shall be sufficiently
given if in writing and mailed or delivered to Guarantor's address shown above
or such other address as provided hereunder, and to Bank, if in writing and
mailed or delivered to Bank's office address shown above or such other address
as Bank may specify in writing from time to time. In the event that Guarantor
changes Guarantor's address at any time prior to the date the Guaranteed
Obligations are paid in full, Guarantor agrees to promptly give written notice
of said change of address to Bank by registered or certified mail, return
receipt requested, all charges prepaid. PLURAL; CAPTIONS. All references in the
Loan Documents to borrower, guarantor, person, document or other nouns of
reference mean both the singular and plural form, as the case may be, and the
term "person" shall mean any individual person or entity. The captions contained
in the Loan Documents are inserted for convenience only and shall not affect the
meaning or interpretation of the Loan Documents. BINDING CONTRACT. Guarantor by
execution of and Bank by acceptance of this Guaranty agree that each party is
bound to all terms and provisions of this Guaranty. AMENDMENTS, WAIVERS AND
REMEDIES. No waivers, amendments or modifications of this Guaranty and other
Loan Documents shall be valid unless in writing and signed by an officer of
Bank. No waiver by Bank of any Default shall operate as a waiver of any other
Default or the same Default on a future occasion. Neither the failure nor any
delay on the part of Bank in exercising any right, power, or privilege granted
pursuant to this Guaranty and other Loan Documents shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise or the exercise of any other right, power or privilege. All
remedies available to Bank with respect to this Guaranty and other Loan
Documents and remedies available at law or in equity shall be cumulative and may
be pursued concurrently or successively. PARTNERSHIPS. If Guarantor is a
partnership, the obligations, liabilities and agreements on the part of
Guarantor shall remain in full force and effect and fully applicable
notwithstanding any changes in the individuals comprising the partnership. The
term "Guarantor" includes any altered or successive partnerships, and
predecessor partnership(s) and the partners shall not be released from any
obligations or liabilities hereunder. LOAN DOCUMENTS. The term "Loan Documents"
refers to all documents executed in connection with the Guaranteed Obligations
and may include, without limitation, commitment letters that survive closing,
loan agreements, other guaranty agreements, security agreements, instruments,
financing statements, mortgages, deeds of trust, deeds to secure debt, letters
of credit and any amendments or supplements (excluding swap agreements as
defined in 11 U.S. Code ss. 101).
FINANCIAL AND OTHER INFORMATION. Guarantor shall deliver to Bank such
information as Bank may reasonably request from time to time, including without
limitation, financial statements and information pertaining to Guarantor's
financial condition. Such information shall be true, complete, and accurate.
ANNUAL FINANCIAL STATEMENTS. Guarantor shall deliver to Bank annually, within
thirteen months of the previous statement date on file with Bank, Guarantor's
financial statement. Said financial statement shall disclose all of Guarantor's
assets, liabilities, net worth, income and contingent liabilities, all in
reasonable detail and acceptable to Bank and submitted on a form to be provided
by Bank or on
Page 4
5
such other form acceptable to Bank, signed by Guarantor and certified by
Guarantor to Bank to be true, correct and complete.
ARBITRATION. Upon demand of any party hereto, whether made before or after
institution of any judicial proceeding, any claim or controversy arising out of
or relating to the Loan Documents between parties hereto (a "Dispute") shall be
resolved by binding arbitration conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") and the Federal Arbitration Act. Disputes
may include, without limitation, tort claims, counterclaims, a dispute as to
whether a matter is subject to arbitration, claims brought as class actions, or
claims arising from documents executed in the future. A judgment upon the award
may be entered in any court having jurisdiction. Notwithstanding the foregoing,
this arbitration provision does not apply to disputes under or related to swap
agreements. SPECIAL RULES. All arbitration hearings shall be conducted in the
city named in the address of Bank first stated above. A hearing shall begin
within 90 days of demand for arbitration and all hearings shall conclude within
120 days of demand for arbitration. These time limitations may not be extended
unless a party shows cause for extension and then for no more than a total of 60
days. The expedited procedures set forth in Rule 51 et seq. of the Arbitration
Rules shall be applicable to claims of less than $1,000,000.00. Arbitrators
shall be licensed attorneys selected from the Commercial Financial Dispute
Arbitration Panel of the AAA. The parties do not waive applicable Federal or
state substantive law except as provided herein. PRESERVATION AND LIMITATION OF
REMEDIES. Notwithstanding the preceding binding arbitration provisions, the
parties agree to preserve, without diminution, certain remedies that any party
may exercise before or after an arbitration proceeding is brought. The parties
shall have the right to proceed in any court of proper jurisdiction or by
self-help to exercise or prosecute the following remedies, as applicable: (i)
all rights to foreclose against any real or personal property or other security
by exercising a power of sale or under applicable law by judicial foreclosure
including a proceeding to confirm the sale; (ii) all rights of self-help
including peaceful occupation of real property and collection of rents, set-off,
and peaceful possession of personal property; (iii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary bankruptcy
proceeding; and (iv) when applicable, a judgment by confession of judgment. Any
claim or controversy with regard to any party's entitlement to such remedies is
a Dispute. WAIVER OF EXEMPLARY DAMAGES. The parties agree that they shall not
have a remedy of punitive or exemplary damages against other parties in any
Dispute and hereby waive any right or claim to punitive or exemplary damages
they have now or which may arise in the future in connection with any Dispute
whether the Dispute is resolved by arbitration or judicially. WAIVER OF JURY
TRIAL. THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE
IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO JURY TRIAL WITH REGARD TO A
DISPUTE.
IN WITNESS WHEREOF, Guarantor, on the day and year first written above, has
caused this Unconditional Guaranty to be executed under seal.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ (SEAL)
----------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Taxpayer Identification Number: ###-##-####
Page 5