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EXHIBIT 10.3
[FORM OF]
SUBSIDIARY GUARANTEE AGREEMENT
SUBSIDIARY GUARANTEE AGREEMENT dated as of November 22, 2002 ,
among
each of the Subsidiaries listed on Schedule I hereto (each such
subsidiary
individually, a "Guarantor" and collectively, the "Guarantors")
of AMERICAN
HEALTHWAYS, INC., a Delaware corporation (the "Borrower"), and
SUNTRUST BANK, a
Georgia banking corporation, as administrative agent (the
"Administrative
Agent") for the Lenders (as defined in the Credit Agreement
referred to below).
Reference is made to the Amended and Restated Revolving
Credit
Agreement dated as of November 22, 2002 (as amended,
supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the
Borrower, the
lenders from time to time party thereto (the "Lenders") and
SunTrust Bank, as
administrative agent for the Lenders (in such capacity, the
"Administrative
Agent"), and issuing bank (in such capacity, the "Issuing
Bank"). Capitalized
terms used herein and not defined herein shall have the meanings
assigned to
such terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, and the
Issuing
Bank has agreed to issue Letters of Credit for the account of
the Borrower,
pursuant to, and upon the terms and subject to the conditions
specified in, the
Credit Agreement. Each of the Guarantors is a direct or indirect
wholly-owned
Subsidiary of the Borrower and acknowledges that it will derive
substantial
benefit from the making of the Loans by the Lenders, and the
issuance of the
Letters of Credit by the Issuing Bank. The obligations of the
Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit are
conditioned on,
among other things, the execution and delivery by the Guarantors
of a Subsidiary
Guarantee Agreement in the form hereof. As consideration
therefor and in order
to induce the Lenders to make Loans and the Issuing Bank to
issue Letters of
Credit, the Guarantors are willing to execute this Subsidiary
Guarantee
Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. Each Guarantor unconditionally
guarantees,
jointly with the other Guarantors and severally, as a primary
obligor and not
merely as a surety, (a) the due and punctual payment of (i) the
principal of and
premium, if any, and interest (including interest accruing
during the pendency
of any bankruptcy, insolvency, receivership or other similar
proceeding,
regardless of whether allowed or allowable in such proceeding)
on the Loans,
when and as due, whether at maturity, by acceleration, upon one
or more dates
set for prepayment or otherwise, (ii) each payment required to
be made by the
Borrower under the Credit Agreement in respect of any Letter of
Credit, when and
as due, including payments in respect of reimbursement or
disbursements,
interest thereon and obligations to provide cash collateral, and
(iii) all other
monetary obligations, including fees, costs, expenses and
indemnities, whether
primary, secondary, direct, contingent, fixed or otherwise
(including monetary
obligations incurred during the pendency of any bankruptcy,
insolvency,
receivership or other similar proceeding, regardless of whether
allowed or
allowable in such proceeding), of the Loan Parties
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to the Administrative Agent and the Lenders under the Credit
Agreement and the
other Loan Documents, (b) the due and punctual performance of
all covenants,
agreements, obligations and liabilities of the Loan Parties
under or pursuant to
the Credit Agreement and the other Loan Documents; and (c) the
due and punctual
payment and performance of all obligations of the Borrower,
monetary or
otherwise, under each Hedging Agreement entered into with a
counterparty that
was a Lender or an Affiliate of a Lender at the time such
Hedging Agreement was
entered into (all the monetary and other obligations referred to
in the
preceding clauses (a) through (c) being collectively called the
"Obligations").
Each Guarantor further agrees that the Obligations may be
extended or renewed,
in whole or in part, without notice to or further assent from
it, and that it
will remain bound upon its guarantee notwithstanding any
extension or renewal of
any Obligation.
SECTION 2. Obligations Not Waived. To the fullest extent
permitted by
applicable law, each Guarantor waives presentment to, demand of
payment from and
protest to the Borrower of any of the Obligations, and also
waives notice of
acceptance of its guarantee and notice of protest for
nonpayment. To the fullest
extent permitted by applicable law, the obligations of each
Guarantor hereunder
shall not be affected by (a) the failure of the Administrative
Agent or any
Lender to assert any claim or demand or to enforce or exercise
any right or
remedy against the Borrower or any other Guarantor under the
provisions of the
Credit Agreement, any other Loan Document or otherwise, (b) any
rescission,
waiver, amendment or modification of, or any release from any of
the terms or
provisions of, this Agreement, any other Loan Document, any
Guarantee or any
other agreement, including with respect to any other Guarantor
under this
Agreement, or (c) the failure to perfect any security interest
in, or the
release of, any of the security held by or on behalf of the
Administrative Agent
or any Lender.
SECTION 3. Security. Each of the Guarantors authorizes the
Administrative Agent and each of the Lenders to (a) take and
hold security for
payment of this Guarantee and the Obligations and exchange,
enforce, waive and
release any such security, (b) apply such security and direct
the order or
manner of sale thereof as they in their sole discretion may
determine and (c)
release or substitute any one or more endorsees, other
guarantors of other
obligors.
SECTION 4. Guarantee of Payment. Each Guarantor further agrees
that its
guarantee constitutes a guarantee of payment when due and not of
collection, and
waives any right to require that any resort be had by the
Administrative Agent
or any Lender to any of the security held for payment of the
Obligations or to
any balance of any deposit account or credit on the books of the
Administrative
Agent or any Lender in favor of the Borrower or any other
person.
SECTION 5. No Discharge or Diminishment of Guarantee. The
obligations
of each Guarantor hereunder shall not be subject to any
reduction, limitation,
impairment or termination for any reason (other than the
indefeasible payment in
full in cash of the Obligations), including any claim of waiver,
release,
surrender, alteration or compromise of any of the Obligations,
and shall not be
subject to any defense or setoff, counterclaim, recoupment or
termination
whatsoever by reason of the invalidity, illegality or
unenforceability of the
Obligations or otherwise. Without limiting the generality of the
foregoing, the
obligations of each Guarantor hereunder shall not be discharged
or impaired or
otherwise affected by the failure of the Administrative Agent or
any Lender to
assert any claim or demand or to enforce any remedy under the
Credit Agreement,
any other Loan Document or any other agreement, by any waiver
or
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modification of any provision of any thereof, by any default,
failure or delay,
willful or otherwise, in the performance of the Obligations, or
by any other act
or omission that may or might in any manner or to the extent
vary the risk of
any Guarantor or that would otherwise operate as a discharge of
each Guarantor
as a matter of law or equity (other than the indefeasible
payment in full in
cash of all the Obligations).
SECTION 6. Defenses of Borrower Waived. To the fullest extent
permitted
by applicable law, each Guarantor waives any defense based on or
arising out of
any defense of the Borrower or the unenforceability of the
Obligations or any
part thereof from any cause, or the cessation from any cause of
the liability of
the Borrower, other than the final and indefeasible payment in
full in cash of
the Obligations. The Administrative Agent and the Lenders may,
at their
election, foreclose on any security held by one or more of them
by one or more
judicial or nonjudicial sales, accept an assignment of any such
security in lieu
of foreclosure, compromise or adjust any part of the
Obligations, make any other
accommodation with the Borrower or any other guarantor, without
affecting or
impairing in any way the liability of any Guarantor hereunder
except to the
extent the Obligations have been fully, finally and indefeasibly
paid in cash.
Pursuant to applicable law, each Guarantor waives any defense
arising out of any
such election even though such election operates, pursuant to
applicable law, to
impair or to extinguish any right of reimbursement or
subrogation or other right
or remedy of such Guarantor against the Borrower or any other
Guarantor or
guarantor, as the case may be, or any security.
SECTION 7. Agreement to Pay; Subordination. In furtherance of
the
foregoing and not in limitation of any other right that the
Administrative Agent
or any Lender has at law or in equity against any Guarantor by
virtue hereof,
upon the failure of the Borrower or any other Loan Party to pay
any Obligation
when and as the same shall become due, whether at maturity, by
acceleration,
after notice of prepayment or otherwise, each Guarantor hereby
promises to and
will forthwith pay, or cause to be paid, to the Administrative
Agent for the
benefit of the Lenders in cash the amount of such unpaid
Obligations. Upon
payment by any Guarantor of any sums to the Administrative
Agent, all rights of
such Guarantor against the Borrower arising as a result thereof
by way of right
of subrogation, contribution, reimbursement, indemnity or
otherwise shall in all
respects be subordinate and junior in right of payment to the
prior indefeasible
payment in full in cash of all the Obligations. In addition, any
indebtedness of
the Borrower now or hereafter held by any Guarantor is hereby
subordinated in
right of payment to the prior payment in full in cash of the
Obligations. If any
amount shall erroneously be paid to any Guarantor on account of
(i) such
subrogation, contribution, reimbursement, indemnity or similar
right or (ii) any
such indebtedness of the Borrower, such amount shall be held in
trust for the
benefit of the Administrative Agent and the Lenders and shall
forthwith be paid
to the Administrative Agent to be credited against the payment
of the
Obligations, whether matured or unmatured, in accordance with
the terms of the
Loan Documents.
SECTION 8. Information. Each Guarantor assumes all
responsibility for
being and keeping itself informed of the Borrower's financial
condition and
assets, and of all other circumstances bearing upon the risk of
nonpayment of
the Obligations and the nature, scope and extent of the risks
that such
Guarantor assumes and incurs hereunder, and agrees that none of
the
Administrative Agent or the Lenders will have any duty to advise
any of the
Guarantors of information known to it or any of them regarding
such
circumstances or risks.
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SECTION 9. Representations and Warranties. Each Guarantor
represents
and warrants as to itself that all representations and
warranties relating to it
(as a Subsidiary of the Borrower) contained in the Credit
Agreement are true and
correct as of the date made.
SECTION 10. Termination. The guarantees made hereunder (a)
shall
terminate when all the Obligations have been paid in full in
cash and the
Lenders have no further commitment to lend under the Credit
Agreement, the LC
Exposure has been reduced to zero and the Issuing Bank has no
further obligation
to issue Letters of Credit under the Credit Agreement and (b)
shall continue to
be effective or be reinstated, as the case may be, if at any
time payment, or
any part thereof, of any Obligatio
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