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Exhibit
10.85
SUBSIDIARY GUARANTY
AGREEMENT
THIS SUBSIDIARY GUARANTY
AGREEMENT dated as of June 13, 2008, among each of the
Subsidiaries listed on Schedule I hereto (each such
subsidiary individually, a “ Guarantor ” and
collectively, the “ Guarantors ”) of
EXACTECH, INC ., a Florida 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
Revolving Credit Agreement dated as of June 13, 2008 (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 swingline lender (in such capacity, the “
Swingline Lender ”). 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 Swingline Lender has agreed to
make the Swingline Loan to the Borrower, pursuant to, and upon the
terms and subject to the conditions specified in, the Credit
Agreement. Each Guarantor, as a direct or indirect wholly-owned
subsidiary of the Borrower, is engaged in a related and mutually
interdependent business with the Borrower and, as a consequence,
will derive substantial direct and indirect financial and business
advantages and benefits from the transactions contemplated by the
Credit Agreement, including Borrower’ receipt of the funds
contemplated thereby. The obligations of the Lenders to make Loans
and of the Swingline Lender to make the Swingline Loan are
conditioned on, among other things, the execution and delivery by
the Guarantors of a Subsidiary Guaranty Agreement in the form
hereof. As consideration therefor and in order to induce the
Lenders to make Loans and the Swingline Lender to make the
Swingline Loan, the Guarantors are willing to execute this
Subsidiary Guaranty 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 Hedging Agreement, including 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 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
Annex - 1
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 Guaranty 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 modification of
any provision of any thereof, by any default, failure or delay,
willful or otherwise, in the performance
Annex - 2
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
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