Exhibit 10.3
AMENDED AND RESTATED GUARANTY
AMENDED AND RESTATED GUARANTY (which shall replace the Guaranty dated
as of March 12, 1999, as confirmed June 15, 1999), dated as of March 31, 2000,
by InterDent, Inc., a Delaware corporation (the "GUARANTOR"), in favor of Union
Bank of California, N.A., as administrative agent (the "AGENT") for (i) the
lenders (the "LENDERS") named in Schedule 2.01 (a) of the Amended and Restated
Credit Agreement dated as of June 15, 1999, among Gentle Dental Service
Corporation, a Washington corporation, Gentle Dental Management, Inc., a
Delaware corporation and Dental Care Alliance, Inc., a Delaware corporation (the
"BORROWERS"), the Lenders, The Chase Manhattan Bank, as syndication agent and
the Agent (as amended, modified or supplemented from time to time in accordance
with its terms, the "CREDIT AGREEMENT"), (ii) the Lenders ("2000 Lenders") under
the 2000 Credit Agreement, and (iii) for itself as issuer of the Letters of
Credit and "Letters of Credit" under the 2000 Credit Agreement. Capitalized
terms used herein and not defined herein shall have the respective meanings
assigned to such terms in the Credit Agreement.
The Agent, the Lenders and the 2000 Lenders have agreed to extend Loans
and "Loans" under the 2000 Credit Agreement and certain other financial
accommodations including, without limitation, the issuance of Letters of Credit
and "Letters of Credit" under the 2000 Credit Agreement to the Borrowers
pursuant to, and subject to the terms and conditions of the Credit Agreement and
2000 Credit Agreement. The obligation of the Lenders and the 2000 Lenders to
extend such Loans under the Credit Agreement and 2000 Credit Agreement is
conditioned on the execution and delivery by the Guarantor of a guaranty in the
form hereof of the Obligations and 2000 Obligations (such Obligations to
include, without limitation, the due and punctual payment and performance of (a)
the principal of and interest on the Loans and "Loans" under the 2000 Credit
Agreement, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (b) all other obligations of the
Borrowers at any time and from time to time under the Credit Agreement, the 2000
Credit Agreement and the other Loan Documents and (e) all obligations of the
Guarantor at any time and from time to time under the Loan Documents.
Accordingly, in consideration of the premises and in order to induce
the Agent and the Lenders and the 2000 Lenders to make Loans and "Loans" under
the 2000 Credit Agreement and extend other financial accommodations under the
Credit Agreement and 2000 Credit Agreement, the Guarantor hereby agrees as
follows:
Section 1. GUARANTY. The Guarantor hereby irrevocably and
unconditionally guarantees the punctual payment when due, whether at stated
maturity,
by acceleration or otherwise, and the punctual performance, of all present and
future Obligations and 2000 Obligations of the Borrowers (the foregoing being
herein referred to as the "GUARANTEED OBLIGATIONS").
Section 2. WAIVER. The Guarantor hereby absolutely, unconditionally and
irrevocably waives, to the fullest extent permitted by law, (i) promptness,
diligence, notice of acceptance and any other notice with respect to this
Guaranty, (ii) presentment, demand of payment, protest, notice of dishonor or
nonpayment and any other notice with respect to the Guaranteed Obligations,
(iii) any requirement that the Agent or Lenders or 2000 Lenders protect, secure,
perfect or insure any security interest or Lien or any property subject thereto
or exhaust any right or take any action against the Borrowers or any other
person or any Collateral, and (iv) any other action, event or precondition to
the enforcement of this Guaranty or the performance by the Guarantor of the
obligations hereunder.
Section 3. GUARANTY ABSOLUTE. (a) The Guarantor guarantees that, to the
fullest extent permitted by law, the Guaranteed Obligations will be paid or
performed strictly in accordance with their terms, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of the Agent or any Lender with respect thereto.
(b) No invalidity, irregularity, voidability, voidness or
unenforceability of the Credit Agreement, the 2000 Credit Agreement the Notes,
the "Notes" under the 2000 Credit Agreement or any other Loan Document or any
other agreement or instrument relating thereto, or of all or any part of the
Guaranteed Obligations or of any security therefor shall affect, impair or be a
defense to this Guaranty.
(c) This Guaranty is one of payment and performance, not collection,
and the obligations of the Guarantor under this Guaranty are independent of the
Guaranteed Obligations of the Borrowers, and a separate action or actions may be
brought and prosecuted against the Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against the Borrowers or whether
the Borrowers are joined in any such action or actions.
(d) The liability of the Guarantor under this Guaranty shall be
absolute and unconditional irrespective of:
(i) any change in the manner, place or terms of payment or
performance, and/or any change or extension of the time of payment or
performance of, renewal or alteration of, any Guaranteed Obligation,
any security therefor, or any liability incurred directly or indirectly
in respect thereof, or any other amendment or waiver of or any consent
to departure from the Credit Agreement, the 2000 Credit Agreement or
the Notes, the "Notes" under the 2000
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Credit Agreement or any other Loan Document, including any increase in
the Guaranteed Obligations resulting from the extension of additional
credit to the Borrowers or any of its subsidiaries or otherwise;
(ii) any sale, exchange, release, surrender, realization upon
any property by whomsoever at any time pledged or mortgaged to secure,
or howsoever securing, all or any of the Guaranteed Obligations, and/or
any offset against, or failure to perfect, or continue the perfection
of, any Lien in any such property, or delay in the perfection of any
such Lien, or any amendment or waiver of or consent to departure from
any other guaranty for all or any of the Guaranteed Obligations;
(iii) any exercise or failure to exercise any rights against
the Borrowers or others (including the Guarantor);
(iv) any settlement or compromise of any Guaranteed
Obligation, any security therefor or any liability (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and any subordination of the payment of all or any part thereof
to the payment of any Guaranteed Obligation (whether due or not) of the
Borrowers to creditors of the Borrowers other than the Guarantor,
(v) any manner of application of Collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of
sale or other disposition of any Collateral for all or any of the
Guaranteed Obligations or any other assets of the Borrowers or any of
its subsidiaries;
(vi) any change, restructuring or termination of the existence
of the Borrowers or any of its subsidiaries; or
(vii) any other agreements or circumstance of any nature
whatsoever which might otherwise constitute a defense available to, or
a discharge of, this Guaranty and/or obligations of the Guarantor
hereunder, or a defense to, or discharge of, the Borrowers or any other
person or party relating to this Guaranty or the obligations of the
Guarantor hereunder or otherwise with respect to the Loans, the "Loans"
under the 2000 Credit Agreement, or other financial accommodations to
the Borrowers.
(e) The Agent may at any time and from time to time (whether or not
after revocation or termination of this Guaranty) without the consent of, or
notice (except as shall be required by applicable statute and cannot be waived)
to, the Guarantor, and without incurring responsibility to the Guarantor or
impairing or releasing the obligations of the Guarantor hereunder, apply any
sums by whomsoever paid or howsoever realized
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to any Guaranteed Obligation regardless of what Guaranteed Obligations remain
unpaid. Any such application shall be in accordance with Section 16 of the
Security Agreement.
(f) This Guaranty shall continue to be effective or be reinstated, as
the case may be, if claim is ever made upon the Agent or any Lender or 2000
Lender for repayment or recovery of any amount or amounts received by the Agent
or such Lender in payment or on account of any of the Guaranteed Obligations and
the Agent or such Lender repays all or part of said amount by reason of any
judgment, decree or order of any court or administrative body having
jurisdiction over the Agent or such Lender or the respective property of each,
or any settlement or compromise of any such claim effected by the Agent or such
Lender with any such claimant (including the Borrowers), then and in such event
the Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon the Guarantor, notwithstanding any revocation
hereof or the cancellation of any note (including the Notes and "Notes" under
the 2000 Credit Agreement) or other instrument evidencing any Guaranteed
Obligation, and the Guarantor shall be and remain liable to the Agent and/or
such Lender hereunder for the amount so repaid or recovered to the same extent
as if such amount had never originally been received by the Agent or such
Lender.
Section 4. CONTINUING GUARANTY. This Guaranty is a continuing one and
shall (i) remain in full force and effect until the indefeasible payment and
satisfaction in full of the Guaranteed Obligations, (ii) be binding upon the
Guarantor, its successors and assigns, and (iii) inure to the benefit of, and be
enforceable by, the Agent and its successors, transferees and assigns. All
obligations to which this Guaranty applies or may apply under the terms hereof
shall be conclusively presumed to have been created in reliance hereon.
Section 5. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Guarantor
hereby represents, warrants and covenants to and with the Agent that:
(a) The Guarantor has the corporate power to execute and deliver this
Guaranty and to incur and perform its obligations hereunder;
(b) The Guarantor has duly taken all necessary corporate action to
authorize the execution, delivery and performance of this Guaranty and to incur
and perform its obligations hereunder;
(c) No consent, approval, authorization or other action by, and no
notice to or of, or declaration or filing with, any governmental or other public
body, or any other Person, is required for the due authorization, execution,
delivery and performance by the Guarantor of this Guaranty or the consummation
of the transactions contemplated hereby;
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(d) The execution, delivery and performance by the Guarantor of this
Guaranty do not and will not violate or otherwise conflict with any term or
provision of any material agreement, instrument, judgment, decree, order or any
statute, rule or governmental regulation applicable to the Guarantor or result
in the creation of any Lien upon any of its properties or assets pursuant
thereto;
(e) This Guaranty has been duly authorized, executed and delivered by
the Guarantor and constitutes the legal, valid and binding obligation of the
Guarantor, and is enforceable against the Guarantor in accordance with its
terms, except as enforcement thereof may be subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar law
affecting creditors' rights generally, and general principles of equity
(regardless of whether such enforcement is sought in a proceeding in equity or
at law);
(f) No proceeding referred to in paragraph (e) or (f) of Article VIII
of the Credit Agreement is pending against the Guarantor and no other event
referred to in such Article VIII has occurred and is continuing, and the
property of the Guarantor is not subject to any assignment for the benefit of
creditors;
(g) The capital stock of the Borrowers owned by the Guarantor on the
date hereof consists of all of the authorized, issued and outstanding capital
stock of the Borrowers on the date hereof and the Borrowers have no outstanding
rights, options, warrants or agreements pursuant to which it may be required to
sell any of its capital stock or other equity security; and
(h) Without the prior written consent of the Agent, own or operate any
assets or properties or engage in any business or other activity whatsoever
(including, without limitation, the incurring of Indebtedness or the granting of
Liens), except for its ownership of the capital stock of the Borrowers and
activities directly in connection therewith and except as otherwise may be
specifically permitted by the other Loan Documents.
Section 6. EXPENSES. The Guarantor will upon demand reimburse the Agent
for any sums, costs, and expenses which the Agent may pay or incur pursuant to
the provisions of this Guaranty or in negotiating, executing, perfecting,
defending, protecting or enforcing this Guaranty or in enforcing payment of the
Guaranteed Obligations or otherwise in connection with the provisions hereof,
including court costs, collection charges, travel expenses, and reasonable
attorneys' fees, together with interest thereon as specified in Section 12
hereof.
Section 7. TERMS. (a) All terms defined in the UCC and used herein
shall have the meanings as defined in the UCC, unless the context otherwise
requires.
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(b) The words "include," "includes" and "including" shall be deemed to
be followed by the phrase "without limitation".
(c) All references herein to Sections and subsections shall be deemed
to be references to Sections and subsections of this Guaranty unless the context
shall otherwise require.
Section 8. AMENDMENTS AND MODIFICATION. No provision hereof shall be
modified, altered or limited except by written instrument expressly referring to
this Guaranty and to such provision, and executed by the party to be charged.
Section 9. SUBORDINATION OF SUBROGATION RIGHTS. Notwithstanding any
payment made by or for the account of the Guarantor pursuant hereto, the
Guarantor shall not be subrogated to any right of the Agent or any Lender or
Lender under the 2000 Credit Agreement until such time as the Agent shall have
received final payment of the full amount of all Guaranteed Obligations. Until
the Guaranteed Obligations shall have been paid in full, even though the
Guaranteed Obligations are in excess of the liability of the Guarantor
hereunder, the Guarantor waives (a) any right of subrogation, reimbursement,
indemnification, and contribution (contractual, statutory, or otherwise)
including, without limitation, any claim or right of subrogation under the
Bankruptcy Code (Title 11, United States Code) or any successor statute,
arising from the existence or performance hereof, (b) any right to enforce any
remedy which the Agent or any Lender or any Lender under the 2000 Credit
Agreement now has or may hereafter have against the Borrowers, and (c) any
benefit of, and any right to participate in, any security now or hereafter held
by the Agent or any Lender or any Lender under the 2000 Credit Agreement. The
Guarantor understands and acknowledges that if the Agent forecloses, either by
judicial foreclosure or by exercise of power of sale, any deed of trust securing
the Guaranteed Obligations, that foreclosure could impair or destroy any ability
that the Guarantor may have to seek reimbursement, contribution, or
indemnification from the Borrowers or others based on any right the Guarantor
may have of subrogation, reimbursement, contribution, or indemnification for any
amounts paid by the Guarantor under this guarantee. The Guarantor further
understands and acknowledges that in the absence of this paragraph, such
potential impairment or destruction of the Guarantor's rights, if any, may
entitle the Guarantor to assert a defense to this guarantee based on Section
580d of the California Code of Civil Procedure as interpreted in UNION BANK ▇.
▇▇▇▇▇▇▇, 265 Cal. App. 2d. 40 (1968). By executing this Guaranty the Guarantor
freely, irrevocably, and unconditionally: (i) waives and relinquishes that
defense and agrees that the Guarantor will be fully liable hereunder even though
the Agent may foreclose, either by judicial foreclosure or by exercise of power
of sale, any deed of trust securing the Guaranteed Obligations; (ii) agrees
that the Guarantor will not assert that defense in any action or proceeding
which the Agent or any Lender or any Lender under the 2000 Credit Agreement may
commence to enforce this Guaranty; (iii) acknowledges and agrees that the rights
and defenses waived by the Guarantor herein include any right or defense that
the Guarantor may have or be entitled to assert based upon or arising out of any
one or more of Sections 580a, 580b, 580d, or 726 of the California Code of Civil
Procedure or Section 2848 of the California Civil Code; and
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(iv) acknowledges and agrees that the Agent and each Lender and each Lender
under the 2000 Credit Agreement is relying on this waiver in creating the
Guaranteed Obligations, and that this waiver is a material part of the
consideration which the Agent and each Lender and each Lender under the 2000
Credit Agreement is receiving for creating the Guaranteed Obligations.
Section 10. REMEDIES UPON DEFAULT; RIGHT OF SET-OFF. (a) Upon the
occurrence and during the continuance of any Event of Default, the Agent may,
without notice to or demand upon the Borrowers or the Guarantor, declare any
Guaranteed Obligations immediately due and payable, and shall be entitled to
enforce the obligations of the Guarantor hereunder.
(b) Upon such declaration by the Agent, the Agent and any Lender or
Lender under the 2000 Credit Agreement is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by the Agent or any such
Lender to or for the credit or the account of the Guarantor against any and all
of the obligations of the Guarantor now or hereafter existing under this
Guaranty, whether or not the Agent or such Lender shall have made any demand
under this Guaranty and although such obligations may be contingent and
unmatured. The Agent agrees promptly to notify the Guarantor after any such
set-off and application, PROVIDED that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the Agent and
such Lenders under this Section 10 are in addition to other rights and remedies
(including other rights of set-off) which the Agent and such Lenders may have.
The rights of the Agent and any such Lender are subject to the provisions of
Section 2.14 of the 2000 Credit Agreement
Section 11. STATUTE OF LIMITATIONS. Any acknowledgment or new promise,
whether by payment of principal or interest or otherwise and whether by the
Borrowers or others (including the Guarantor), with respect to any of the
Guaranteed Obligations shall, if the statute of limitations in favor of the
Guarantor against the Agent or Lenders or Lenders under the 2000 Credit
Agreement shall have commenced to run, toll the running of such statute of
limitations and, if the period of such statute of limitations shall have
expired, prevent the operation of such statute of limitations.
Section 12. INTEREST. All amounts payable from time to time by the
Guarantor hereunder shall bear interest at the interest rate per annum specified
in Section 2.08 of the Credit Agreement.
Section 13. RIGHTS AND REMEDIES NOT WAIVED. No act, omission or delay
by the Agent shall constitute a waiver of its rights and remedies hereunder or
otherwise. No single or partial waiver by the Agent of any default hereunder or
right or remedy
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which it may have shall operate as a waiver of any other default, right or
remedy or of the same default, right or remedy on a future occasion.
Section 14. ADMISSIBILITY OF GUARANTY. The Guarantor agrees that any
copy of this Guaranty signed by the Guarantor and transmitted by telecopier for
delivery to the Agent shall be admissible in evidence as the original itself in
any judicial or administrative proceeding, whether or not the original is in
existence.
Section 15. NOTICES. All notices, requests and demands to or upon the
Agent or the Guarantor under this Agreement shall be in writing and given as
provided in the Credit Agreement or 2000 Credit Agreement, as applicable (with
respect to the Guarantor, to the address of the Borrowers as set forth in the
Credit Agreement or 2000 Credit Agreement, as applicable).
Section 16. COUNTERPARTS. This Guaranty may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original and all of
which shall together constitute one and the same agreement.
SECTION 17. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL; ETC. (a) ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY MAY BE BROUGHT IN THE
COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, OR, AT THE ELECTION OF AGENT, IN THE COURTS OF
THE STATE OF CALIFORNIA OR OF THE UNITED STATES OF AMERICA FOR THE CENTRAL
DISTRICT OF CALIFORNIA AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY, THE
GUARANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE
GUARANTOR HEREBY IRREVOCABLY WAIVES, IN CONNECTION WITH ANY SUCH ACTION OR
PROCEEDING, (i) TRIAL BY JURY, (ii) TO THE EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE
TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS AND (iii) THE RIGHT TO INTERPOSE ANY SET-OFF, COUNTERCLAIM OR
CROSS-CLAIM (UNLESS SUCH SET-OFF, COUNTERCLAIM OR CROSS-CLAIM COULD NOT, BY
REASON OF ANY APPLICABLE FEDERAL OR STATE PROCEDURAL LAWS, BE INTERPOSED,
PLEADED OR ALLEGED IN ANY OTHER ACTION).
(b) The Guarantor irrevocably consents to the service of process of any
of the aforementioned courts in any such action or proceeding by the mailing of
copies
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thereof by certified mail, postage prepaid, to the Guarantor at its address
determined pursuant to Section 15 hereof.
(c) Nothing herein shall affect the right of the Agent to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against the Guarantor in any other jurisdiction.
(d) The Guarantor hereby waives presentment, notice of dishonor and
protests of all instruments included in or evidencing any of the Guaranteed
Obligations, and any and all other notices and demands whatsoever (except as
expressly provided herein).
SECTION 18. GOVERNING LAW. THIS GUARANTY AND THE GUARANTEED OBLIGATIONS
SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF CALIFORNIA (OTHER
THAN THE CONFLICTS OF LAW PRINCIPLES THEREOF).
Section 19. CAPTIONS; SEPARABILITY. (a) The captions of the Sections
and subsections of this Guaranty have been inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Guaranty.
(b) If any term of this Guaranty shall be held to be invalid, illegal
or unenforceable, the validity of all other terms hereof shall in no way be
affected thereby.
Section 20. ACKNOWLEDGMENT OF RECEIPT. The Guarantor acknowledges
receipt of a copy of this Guaranty and each of the Loan Documents.
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IN WITNESS WHEREOF, the Guarantor has duly executed or caused this
Amended and Restated Guaranty to be duly executed as of the date first above set
forth.
INTERDENT, INC., a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Co-Chairman of the Board and
Chief Executive Officer