UNCONDITIONAL GUARANTY
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This continuing Unconditional Guaranty ("Guaranty") is entered into as of
September 29, 2005, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("Guarantor"), in favor of Silicon
Valley Bank ("Bank").
Recitals
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A. Concurrently herewith, Bank and Zynex Medical, Inc., a Colorado
corporation and Zynex Medical Holdings, Inc., a Nevada corporation (jointly and
severally, 'Borrower"), are entering into that certain Loan and Security
Agreement dated as of the Effective Date (as defined therein) (as amended,
restated, or otherwise modified from time to time, the 'Loan Agreement")
pursuant to which Bank has agreed to make certain advances of money and to
extend certain financial accommodations to Borrower (collectively, the "Loans"),
subject to the terms and conditions set forth therein. Capitalized terms used
but not otherwise defined herein shall have the meanings given them in the Loan
Agreement.
B. In consideration of the agreement of Bank to make the loans to Borrower
under the Loan Agreement, Guarantor is willing to guaranty the full payment and
performance by Borrower of all of its obligations thereunder and under the other
Loan Documents, all as further set forth herein.
C. Guarantor is the chairman. president and CEO of Borrower and will obtain
substantial direct and indirect benefit from the Loans made by Bank to Borrower
under the Loan Agreement.
Now, THEREFORE, to induce Bank to enter into the Loan Agreement, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, Guarantor hereby
represents, warrants, covenants and agrees as follows:
Section 1. Guaranty.
1.1 Unconditional Guaranty of Payment In consideration of the foregoing,
Guarantor hereby irrevocably, absolutely and unconditionally guarantees to Bank
the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of all Obligations. Guarantor agrees
that it shall execute such other documents or agreements and take such action as
Bank shall reasonably request to effect the purposes of this Guaranty.
1.2 Separate Obligations. These obligations are independent of Borrower's
obligations and separate actions may be brought against Guarantor (whether
action is brought against Borrower or whether Borrower is joined in the action).
Section 2. Representations and Warranties.
Guarantor hereby represents and warrants that
(a) Intentionally Omitted
(b) The execution, delivery and performance by Guarantor of this Guaranty
(i) do not contravene any law or any contractual restriction binding on or
affecting Guarantor or by which Guarantor's property may be affected; (ii) do
not require any authorization or approval or other action by, or any notice to
or filing with, any governmental authority or any other Person under any
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which Guarantor is a party or by which Guarantor or any of its property is
bound, except such as have been obtained or made; and (iii) do not result in the
imposition or creation of any Lien upon any property of Guarantor.
(c) Guarantor is legally competent to execute, deliver and perform this
Guaranty.
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(d) This Guaranty is a valid and binding obligation of Guarantor,
enforceable against Guarantor in accordance with its terms, except as the
enforceability thereof may be subject to or limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws relating to or
affecting the rights of creditors generally.
(e) There is no action, suit or proceeding affecting Guarantor pending or
threatened before any court, arbitrator, or governmental authority, domestic or
foreign, which may have a material adverse effect on the ability of Guarantor to
perform its obligations under this Guaranty.
(f) Guarantor's obligations hereunder are not subject to any offset or
defense against Bank or Borrower of any kind.
(g) Intentional1y Omitted.
(h) The personal financial statements as of August 31,2005 for Guarantor
and the U.S. federal and Colorado state 2004 tax returns of Guarantor, copies of
which have been furnished to Bank, fairly present the financial position of
Guarantor for the dates and periods purported to be covered thereby based upon
actual and estimated fair market value, and there has been no material adverse
change in the financial position of Guarantor since the date of such personal
financial statements and tax returns.
(i) Intentionally Omitted.
(j) Intentionally Omitted.
(k) The incurrence of Guarantor's obligations under this Guaranty will not
cause Guarantor to (i) become insolvent; (ii) be left with unreasonably small
capital for any business or transaction in which Guarantor is presently engaged
or plans to be engaged; or (iii) be unable to pay its debts as such debts
mature.
(l) Guarantor covenants, warrants, and represents to Bank that all
representations and warranties contained in this Guaranty shall be true at the
time of Guarantor's execution of this Guaranty, and shall continue to be true so
long as this Guaranty remains in effect. Guarantor expressly agrees that any
misrepresentation or breach of any warranty whatsoever contained in this
Guaranty shall be deemed material.
Section 3. General Waivers. Guarantor waives:
(a) Any right to require Bank to (i) proceed against Borrower or any other
person; (ii) proceed against or exhaust any security or (ii) pursue any other
remedy. Bank may exercise or not exercise any right or remedy it has against
Borrower or any security it holds (including the right to foreclose by judicial
or nonjudicial sale) without affecting Guarantor's liability hereunder.
(b) Any defenses from disability or other defense of Borrower or from the
cessation of Borrowers liabilities.
(c) Any setoff, defense or counterclaim against Bank.
(d) Any defense from the absence, impairment or loss of any right of
reimbursement or subrogation or any other rights against Borrower. Until
Borrower's obligations to Bank have been paid, Guarantor has no right of
subrogation or reimbursement or other rights against Borrower.
(e) Any right to enforce any remedy that Bank has against Borrower.
(f) Any rights to participate in any security held by Bank.
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(g) Any demands for performance, notices of nonperformance or of new or
additional indebtedness incurred by Borrower to Bank. Guarantor is responsible
for being and keeping itself informed of Borrower's financial condition.
(h) The benefit of any act or omission by Bank which directly or indirectly
results in or aids the discharge of Borrower from any of the obligations by
operation of law or otherwise.
Section 4. Real Property Security Waiver. Guarantor acknowledges that, to
the extent Guarantor has or may have rights of subrogation or reimbursement
against Borrower for claims arising out of this Guaranty, those rights may be
impaired or destroyed if Bank elects to proceed against any real property
security of Borrower by non-judicial foreclosure. That impairment or destruction
could, under certain judicial cases and based on equitable principles of
estoppel give rise to a defense by Guarantor against its obligations under this
Guaranty. Guarantor waives that defense and any others arising from Bank's
election to pursue non-judicial foreclosure. Guarantor waives the benefits, if
any, of any statutory or common law rule that may permit a subordinating
creditor to assert any defenses of a surety or guarantor, or that may give the
subordinating creditor the right to require a senior creditor to marshal assets,
and Guarantor agrees that it shall not assert any such defenses or rights.
Section 5. Reinstatement Notwithstanding any provision of the Loan
Agreement to the contrary, the liability of Guarantor hereunder shall be
reinstated and revived and the rights of Bank shall continue if and to the
extent that for any reason any payment by or on behalf of Guarantor or Borrower
is rescinded or must be otherwise restored by Bank, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, all as though such
amount had not been paid. The determination as to whether any such payment must
be rescinded or restored shall be made by Bank in its sale discretion; provided,
however, that if Bank chooses to contest any such matter at the request of
Guarantor, Guarantor agrees to indemnify and hold harmless Bank from all costs
and expenses (including, without limitation, reasonable attorneys' fees) of such
litigation. To the extent any payment is rescinded or restored, Guarantor's
obligations hereunder shall be revived in full force and effect without
reduction or discharge for that payment
Section 6. No Waiver; Amendments. No failure on the part of Bank to
exercise, no delay in exercising and no course of dealing with respect to, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right The remedies herein provided are
cumulative and not exclusive of any remedies provided by law. This Guaranty may
not be amended or modified except by written agreement between Guarantor and
Bank, and no consent or waiver hereunder shall be valid unless in writing and
signed by Bank.
Section 7. Compromise and Settlement. No compromise, Settlement, release,
renewal, extension, indulgence, change in, waiver or modification of any of the
Obligations or the release or discharge of Borrower from the performance of any
of the Obligations shall release or discharge Guarantor from this Guaranty or
the performance of the obligations hereunder.
Section 8. Notice. Any notice or other communication herein required or
permitted to be given shall be in writing and may be delivered in person or sent
by facsimile transmission, overnight courier, or by United States mail,
registered or certified. return receipt requested, postage prepaid and addressed
as follows:
If to Guarantor:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.:
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
If to Bank:
Silicon Valley Bank
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▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.:(▇▇▇) ▇▇▇-▇▇▇▇ Facsimile No.:
(▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as may be substituted by notice given as herein
provided. Every notice, demand, request, consent, approval, declaration or other
communication hereunder shall be deemed to have been duly given or served on the
date on which personally delivered or sent by facsimile transmission or three
(3) Business Days after the same shall have been deposited in the United States
mail. If sent by overnight courier service, the date of delivery shall be deemed
to be the next Business Day after deposited with such service.
Section 9. Entire Agreement This Guaranty constitutes and contains the
entire agreement of the parties and supersedes any and all prior and
contemporaneous agreements, negotiations, correspondence, understandings and
communications between Guarantor and Bank, whether written or oral, respecting
the subject matter hereof.
Section 10. Severability. If any provision of this Guaranty is held to be
unenforceable under applicable law for any reason, it shall be adjusted, if
possible, rather than voided in order to achieve the intent of Guarantor and
Bank to the extent possible. In any event, all other provisions of this Guaranty
shall be deemed valid and enforceable to the fun extent possible under
applicable law.
Section 11. Subordination of Indebtedness. Any illdebtedness or other
obligation of Borrower now or hereafter held by or owing to Guarantor is hereby
suboordinated in time and right of payment to all obligations of Borrower to
Bank, except as such indebtedness or other obligation is expressly permitted to
be paid under the Credit Agreement; and such indebtedness of Borrower to
Guarantor is assigned to Bank as security for this Guaranty, and if Bank SO
requests shall be collected, enforced and received by Guarantor in trust for
Bank and to be paid over to Bank on account of the Obligations of Borrower to
Bank, but without reducing or affecting in any manner the liability of Guarantor
under the other provisions of this Guaranty. Any notes now or hereafter
evidencing such indebtedness of Borrower to Guarantor shall be marked with a
legend that the same are subject to this Guaranty and shall be delivered to
Bank.
Section 12. Business Debt Guarantor hereby represents and agrees that none
of the Obligations and none of Guarantor's obligations hereunder are consumer
debt, or were or shall be incurred by Borrower or Guarantor, respectively,
primarily for personal, family or household purposes. Guarantor further agrees
and represents that the Obligations are and shall be incurred by Borrower, and
the obligations of Guarantor hereunder are and shall be incurred by Guarantor,
for business and commercial purposes only.
Section 13. Separate Property. Notwithstanding anything to the contrary
contained herein, Guarantor hereby expressly agrees that recourse may be had
against Guarantor's separate property for the payment and performance of
Guarantor's obligations hereunder.
Section 14. Payment of Expenses. Guarantor shall pay, promptly on demand,
all Expenses incurred by Bank in defending and/or enforcing this Guaranty. For
purposes hereof, "Expenses. shall mean costs and expenses (including reasonable
fees and disbursements of any law firm or other external counsel and the
allocated cost of internal legal services and all disbursements of internal
counsel) for defending and/or enforcing this Guaranty (including those incurred
in connection with appeals or proceedings by or against any Guarantor under the
United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization.
arrangement, or other relief).
Section 15. Assignment; Governing Law. This Guaranty shall be binding upon
and inure to the benefit of Guarantor and Bank and their respective successors
and assigns, except that Guarantor shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of
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dank, which may be granted or withheld in Bank sole discretion. Any such
purported assignment by Guarantor without Bank's written consent shall be void.
This Guaranty shall be governed by, and construed in accordance with, the laws
of the State of Colorado without regard to principles thereof regarding conflict
of laws.
Section 16. PERSONAL JURISDICTION. GUARANTOR HEREBY IRREVOCABLY AGREES THAT
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OF THE
AGREEMENTS, DOCUMENTS OR INSTRUMENTS DELIVERED IN CONNECTION HEREWITH MAY BE
BROUGHT IN THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF COLORADO AS BANK
MAY ELECT (PROVIDED THAT GUARANTOR ACKNOWLEDGES THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE STATE OF
COLORADO), AND, BY EXECUTION AND DELIVERY HEREOF, GUARANTOR ACCEPTS AND CONSENTS
TO, Generally AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS AND
AGREES THAT SUCH JURISDICTION SHALL BE EXCLUSIVE, UNLESS WAIVED BY BANK IN
WRITING, WITH RESPECT TO ANY ACTION OR PROCEEDING BROUGHT BY GUARANTOR AGAINST
BANK NOTHING HEREIN SHALL LIMIT THE RIGHT OF BANK TO BRING PROCEEDINGS AGAINST
GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION. GUARANTOR HEREBY WAIVES, TO
THE Full EXTENT PERMITTED BY LAW, ANY RIGHT TO STAY OR TO DISMISS ANY ACTION OR
PROCEEDING BROUGHT BEFORE SAID COURTS ON THE BASIS OF FORUM NON CONVENIENS.
Section 17. WAIVER OF JURY TRIAL EACH OF BANK AND GUARANTOR HEREBY WAIVES,
TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS GUARANTY. EACH PARTY HERETO (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
Expressly OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS GUARANTY AND ANY
RELATED INSTRUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE Mutual WAIVERS
AND CERTIFICATIONS IN THIS SECTION 17.
GUARANTOR
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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