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GUARANTY

Guarantee Agreement

GUARANTY | Document Parties: Arranger and Book Runner, CREDIT SUISSE SECURITIES (USA) LLC | BANC OF AMERICA SECURITIES LLC | Cash Management | COMPEX TECHNOLOGIES, LLC | EMPI CORP | EMPI SALES CORP | EMPI, INC | ENCORE MEDICAL ASSET CORPORATION | ENCORE MEDICAL FINANCE CORP | ENCORE MEDICAL FINANCE LLC | ENCORE MEDICAL GP, INC | ENCORE MEDICAL HOLDINGS LLC | ENCORE MEDICAL IHC, INC | ENCORE MEDICAL LLC | ENCORE MEDICAL PARTNERS, INC | Holdings, BANK OF AMERICA, N.A. | SPECTRABRACE LTD You are currently viewing:
This Guarantee Agreement involves

Arranger and Book Runner, CREDIT SUISSE SECURITIES (USA) LLC | BANC OF AMERICA SECURITIES LLC | Cash Management | COMPEX TECHNOLOGIES, LLC | EMPI CORP | EMPI SALES CORP | EMPI, INC | ENCORE MEDICAL ASSET CORPORATION | ENCORE MEDICAL FINANCE CORP | ENCORE MEDICAL FINANCE LLC | ENCORE MEDICAL GP, INC | ENCORE MEDICAL HOLDINGS LLC | ENCORE MEDICAL IHC, INC | ENCORE MEDICAL LLC | ENCORE MEDICAL PARTNERS, INC | Holdings, BANK OF AMERICA, N.A. | SPECTRABRACE LTD

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Title: GUARANTY
Governing Law: New York     Date: 4/18/2007

GUARANTY, Parties: arranger and book runner  credit suisse securities (usa) llc , banc of america securities llc , cash management , compex technologies  llc , empi corp , empi sales corp , empi  inc , encore medical asset corporation , encore medical finance corp , encore medical finance llc , encore medical gp  inc , encore medical holdings llc , encore medical ihc  inc , encore medical llc , encore medical partners  inc , holdings  bank of america  n.a. , spectrabrace ltd
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Exhibit 4.6

 

EXECUTION VERSION

 

 

 

GUARANTY

 

dated as of

 

November 3, 2006

 

among

 

ENCORE MEDICAL HOLDINGS LLC,

 

as Holdings,

 

and

 

CERTAIN SUBSIDIARIES OF HOLDINGS

IDENTIFIED HEREIN,

 

and

 

BANK OF AMERICA, N.A.,

as Collateral Agent

 

 

 

 

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I

 

 

 

Definitions

 

 

 

SECTION 1.01. Credit Agreement

 

1

SECTION 1.02. Other Defined Terms

 

1

 

 

 

ARTICLE II

 

 

 

Guaranty

 

 

 

SECTION 2.01. Guaranty

 

2

SECTION 2.02. Guaranty of Payment

 

3

SECTION 2.03. No Limitations

 

3

SECTION 2.04. Reinstatement

 

4

SECTION 2.05. Agreement To Pay; Subrogation

 

4

SECTION 2.06. Information

 

4

 

 

 

ARTICLE III

 

 

 

Indemnity, Subrogation and Subordination

 

 

 

SECTION 3.01. Indemnity and Subrogation

 

4

SECTION 3.02. Contribution and Subrogation

 

4

SECTION 3.03. Subordination

 

5

 

 

 

ARTICLE IV

 

 

 

Miscellaneous

 

 

 

SECTION 4.01. Notices

 

6

SECTION 4.02. Waivers; Amendment

 

6

SECTION 4.03. Collateral Agent’s Fees and Expenses; Indemnification

 

7

SECTION 4.04. Successors and Assigns

 

7

SECTION 4.05. Survival of Agreement

 

7

SECTION 4.06. Counterparts; Effectiveness; Several Agreement

 

8

SECTION 4.07. Severability

 

8

SECTION 4.08. Right of Set-Off

 

8

SECTION 4.09. Governing Law; Jurisdiction; Consent to Service of Process

 

9

SECTION 4.10. WAIVER OF JURY TRIAL

 

9

SECTION 4.11. Headings

 

9

SECTION 4.12. Security Interest Absolute

 

10

SECTION 4.13. Termination or Release

 

10

SECTION 4.14. Additional Restricted Subsidiaries

 

11

 

i

 

 

Schedules

 

 

 

 

 

Schedule I         Subsidiary Parties

 

 

 

 

 

Exhibits

 

 

 

 

 

Exhibit I             Form of Guaranty Supplement

 

 

 

ii

 

    •  

GUARANTY dated as of November 3, 2006 among ENCORE MEDICAL HOLDINGS LLC (" Holdings "), the Subsidiaries of Holdings from time to time party hereto and BANK OF AMERICA, N.A., as Collateral Agent.

 

Reference is made to the Credit Agreement dated as of November 3, 2006 (as amended, supplemented or otherwise modified from time to time, the " Credit Agreement "), among ENCORE MEDICAL FINANCE LLC (" Borrower "), Holdings, BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer, each lender from time to time party thereto (collectively, the " Lenders " and individually, a " Lender "), BANC OF AMERICA SECURITIES LLC, as Arranger and Book Runner, CREDIT SUISSE SECURITIES (USA) LLC, as Arranger, Book Runner and Syndication Agent, and GENERAL ELECTRIC CAPITAL CORPORATION, as Documentation Agent. The Lenders have agreed to extend credit to the Borrower subject to the terms and conditions set forth in the Credit Agreement. The Guarantors may receive, directly or indirectly, a portion of the proceeds of the Loans under the Credit Agreement and will derive substantial direct and indirect benefits from the transactions contemplated by the Credit Agreement. It is a condition precedent to the making of Loans and the issuance of Letters of Credit by the Lenders under the Credit Agreement and the entry by any Lender or Affiliate of a Lender in its capacity as a provider of cash management services into Cash Management Obligations and Hedge Banks into Secured Hedge Agreements from time to time that the Guarantors shall have executed and delivered this Agreement. Holdings and the Subsidiary Parties are affiliates of the Borrower, will derive substantial benefits from the extension of credit to the Borrower pursuant to the Credit Agreement and are willing to execute and deliver this Agreement in order to induce the Lenders to extend such credit. Accordingly, the parties hereto agree as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.01. Credit Agreement .

 

(a)            Capitalized terms used in this Agreement and not otherwise defined herein have the meanings specified in the Credit Agreement.

 

(b)            The rules of construction specified in Article I of the Credit Agreement also apply to this Agreement.

 

SECTION 1.02. Other Defined Terms . As used in this Agreement, the following terms have the meanings specified below:

 

" Agreement " means this Guaranty.

 

" Bankruptcy Law " has the meaning assigned to such term in Section 2.01.

 

" Claiming Party " has the meaning assigned to such term in Section 3.02.

 

" Collateral Agent " means Bank of America, N.A, in its capacity as collateral agent under any of the Loan Documents, or any successor collateral agent.

 

 

 

" Contributing Party " has the meaning assigned to such term in Section 3.02.

 

" Credit Agreement " has the meaning assigned to such term in the preliminary statement of this Agreement.

 

" Guarantor " means Holdings and each Subsidiary Party.

 

" Guaranty Supplement " means an instrument in the form of Exhibit I hereto.

 

" Holdings " has the meaning assigned to such term in the preliminary statement of this Agreement.

 

" Subordinated Obligations " has the meaning assigned to such term in Section 3.03.

 

" Subsidiary Parties " means (a) those Subsidiaries identified on Schedule I and (b) each other Restricted Subsidiary that becomes a party to this Agreement as a Subsidiary Party after the Closing Date.

 

ARTICLE II

 

Guaranty

 

SECTION 2.01. Guaranty .

 

(a)            Each Guarantor unconditionally guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as a surety, the due and punctual payment and performance of the Obligations. Each of the Guarantors 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. Each of the Guarantors waives presentment to, demand of payment from and protest to the Borrower or any other Loan Party of any of the Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment.

 

(b)            Each Guarantor, and by its acceptance of this Agreement, the Collateral Agent and each other Secured Party, hereby confirms that it is the intention of all such Persons that this Agreement and the Obligations of each Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law (as hereinafter defined), the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent applicable to this Agreement and the Obligations of each Guarantor hereunder. To effectuate the foregoing intention, the Collateral Agent, the other Secured Parties and the Guarantors hereby irrevocably agree that the Obligations of each Guarantor under this Agreement at any time shall be limited to the maximum amount as will result in the Obligations of such Guarantor under this Agreement not constituting a fraudulent transfer or conveyance. For purposes hereof, " Bankruptcy Law " means any proceeding of the type referred to in Section 8.01(f) of the Credit Agreement or Title 11, U.S. Code, or any similar foreign, federal or state law for the relief of debtors.

 

2

 

 

SECTION 2.02. Guaranty of Payment . Each of the Guarantors further agrees that its guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Collateral Agent or any other Secured Party to any security held for the payment of the Obligations, or to any balance of any deposit account or credit on the books of the Collateral Agent or any other Secured Party in favor of the Borrower or any other Person.

 

SECTION 2.03. No Limitations .

 

(a)            Except for termination of a Guarantor’s obligations hereunder as expressly provided in Section 4.13, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations, or otherwise. Any and all payments made by the Guarantor under or in respect of this Agreement or any other Loan Document shall be made, in accordance with Section 3.01 of the Credit Agreement. Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by (i) the failure of the Collateral Agent or any other Secured Party to assert any claim or demand or to enforce any right or remedy under the provisions of any Loan Document or otherwise; (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, any Loan Document or any other agreement, including with respect to any other Guarantor under this Agreement; (iii) the release of any security held by the Collateral Agent or any other Secured Party for the Obligations; (iv) any default, failure or delay, willful or otherwise, in the performance of the Obligations; or (v) any other act or omission that may or might in any manner or to any extent vary the risk of any Guarantor or otherwise operate as a discharge of any Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Obligations). Each Guarantor expressly authorizes the Secured Parties to take and hold security for the payment and performance of the Obligations, to exchange, waive or release any or all such security (with or without consideration), to enforce or apply such security and direct the order and manner of any sale thereof in their sole discretion or to release or substitute any one or more other guarantors or obligors upon or in respect of the Obligations, all without affecting the obligations of any Guarantor hereunder.

 

(b)            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 any other Loan Party 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 or any other Loan Party, other than the indefeasible payment in full in cash of all the Obligations. The Collateral Agent and the other Secured Parties may in accordance with the terms of the Collateral Documents, 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 Loan Party or exercise any other right or remedy available to them against the Borrower or any other Loan Party, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Obligations have been fully and indefeasibly paid in full in cash. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such

 

3

 

 

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 Loan Party, as the case may be, or any security.

 

SECTION 2.04. Reinstatement . Each of the Guarantors agrees that its guarantee hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation, is rescinded or must otherwise be restored by the Collateral Agent or any other Secured Party upon the bankruptcy or reorganization of the Borrower, any other Loan Party or otherwise.

 

SECTION 2.05. Agreement To Pay; Subrogation . In furtherance of the foregoing and not in limitation of any other right that the Collateral Agent or any other Secured Party 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 Collateral Agent for distribution to the Secured Parties in cash the amount of such unpaid Obligation. Upon payment by any Guarantor of any sums to the Collateral Agent as provided above, all rights of such Guarantor against the Borrower or any other Loan Party arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subject to Article III.

 

SECTION 2.06. Information . Each Guarantor assumes all responsibility for being and keeping itself informed of the Borrower’s and each other Loan Party’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 Collateral Agent or the other Secured Parties will have any duty to advise such Guarantor of information known to it or any of them regarding such circumstances or risks.

 

ARTICLE III

 

Indemnity, Subrogation and Subordination

 

SECTION 3.01. Indemnity and Subrogation . In addition to all such rights of indemnity and subrogation as the Guarantors may have under applicable law (but subject to Section 3.03), the Borrower agrees that in the event a payment of an obligation shall be made by any Guarantor under this Agreement, the Borrower shall indemnify such Guarantor for the full amount of such payment and such Guarantor shall be subrogated to the rights of the Person to whom such payment shall have been made to the extent of such payment.

 

SECTION 3.02. Contribution and Subrogation . Each Subsidiary Party (a " Contributing Party ") agrees (subject to Section 3.03) that, in the event a payment shall be made by any other Subsidiary Party hereunder in respect of any Obligation and such other Subsidiary Party (the " Claiming Party ") shall not have been fully indemnified by the Borrower as provided in Section 3.01, the Contributing Party shall indemnify the Claiming Party in an amount equal to the amount of such payment, in each case multiplied by a fraction of which the numerator shall be the net worth of the Contributing Party on the date hereof and the

 

4

 

 

denominator shall be the aggregate net worth of all the Contributing Parties together with the net worth of the Claiming Party on the date hereof (or, in the case of any Guarantor becoming a party hereto pursuant to Section 4.14, the date of the Guaranty Supplement hereto executed and delivered by such Guarantor). Any Contributing Party making any payment to a Claiming Party pursuant to this Section 3.02 shall be subrogated to the rights of such Claiming Party to the extent of such payment.

 

SECTION 3.03. Subordination .

 

(a)            Notwithstanding any provision of this Agreement to the contrary, all rights of the Guarantors under Sections 3.01 and 3.02 and all other rights of indemnity, contribution or subrogation under applicable law or otherwise shall be fully subordinated to the indefeasible payment in full in cash of the Obligations. No failure on the part of the Borrower or any Guarantor to make the payments required by Sections 3.01 and 3.02 (or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and liabilities of any Guarantor with respect to its obligations hereunder, and each Guarantor shall remain liable for the full amount of the obligations of such Guarantor hereunder.

 

(b)            Each Guarantor hereby agrees that upon the occurrence and during the continuance of an Event of Default and after notice from the Collateral Agent all Indebtedness owed by it to any Subsidiary shall be fully subordinated to the indefeasible payment in full in cash of the Obligations.

 

(c)            Each Guarantor hereby subordinates any and all debts, liabilities and other obligations owed to such Guarantor by each other Loan Party in respect of any payment by any Guarantor under this Agreement (the " Subordinated Obligations ") to the Obligations to the extent and in the manner hereinafter set forth in this Section 3.03:

 

(d)            Prohibited Payments, Etc . Except during the continuance of an Event of Default and after notice from the Collateral Agent, each Guarantor may receive regularly scheduled payments from any other Loan Party on account of the Subordinated Obligations. After the occurrence and during the continuance of any Event of Default and after notice from the Collateral Agent, however, unless the Collateral Agent otherwise agrees, no Guarantor shall demand, accept or take any action to collect any payment on account of the Subordinated Obligations.

 

(e)            Prior Payment of Obligations . In any proceeding under any Bankruptcy Law relating to any other Loan Party, each Guarantor agrees that the Secured Parties shall be entitled to receive payment in full in cash of all Obligations before such Guarantor receives payment of any Subordinated Obligations.

 

(f)             Turn-Over . After the occurrence and during the continuance of any Event


 
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