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Exhibit 10.59
GUARANTY
THIS GUARANTY, dated as of September 30, 1998, is executed by XXX
RESEARCH CORPORATION, a Delaware corporation ("Guarantor"), in favor of ABN AMRO
BANK N.V., acting as agent (in such capacity, and each successor thereto in such
capacity, "Agent") for the financial institutions which are from time to time
parties to the Loan Agreement referred to in Recital A below (collectively,
"Lenders").
RECITALS
A. Pursuant to a Loan Agreement dated as of September 30, 1998 (as
amended from time to time, the "Borrower Loan Agreement"), among Xxx Research
Co., Ltd., a Japanese limited liability stock company ("Borrower"), the Lenders
and Agent, the Lenders have agreed to extend a certain credit facility to
Borrower upon the terms and subject to the conditions set forth therein.
Borrower is a wholly-owned Subsidiary of Guarantor.
B. The Lenders' obligations to extend the credit facility to Borrower
under the Borrower Loan Agreement are subject, among other conditions, to
receipt by Agent of this Guaranty, duly executed by Guarantor.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Guarantor hereby agrees with Agent, for the ratable benefit of the
Lenders and Agent, as follows:
1. DEFINITIONS AND INTERPRETATION.
(a) Definitions. When used in this Guaranty, the following terms
shall have the following respective meanings:
"Affiliate" shall mean, with respect to any Person, (a) each
Person that, directly or indirectly, owns or controls, whether
beneficially or as a trustee, guardian or other fiduciary, ten percent
(10%) or more of any class of Equity Securities of such Person, (b) each
Person that controls, is controlled by or is under common control with
such Person or any Affiliate of such Person or (c) each of such Person's
officers, directors, joint venturers and partners; provided, however,
that in no case shall Agent or any Lender be deemed to be an Affiliate
of Guarantor or any of its Subsidiaries for purposes of this Guaranty.
For the purpose of this definition, "control" of a Person shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of its
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management or policies, whether through the ownership of voting
securities, by contract or otherwise.
"Agent" shall have the meaning given to that term in the
introductory paragraph hereof.
"Base Rate" shall mean, on any day, the greater of (a) the Prime
Rate in effect on such date and (b) the Federal Funds Rate for such day
plus one-half percent (0.50%). ("Federal Funds Rate" shall mean, for any
day, the rate per annum set forth in the weekly statistical release
designated as H.15(519), or any successor publication, published by the
Federal Reserve Board (including any such successor publication, "H.15
(519)") for such day opposite the caption "Federal Funds (Effective)".
"Prime Rate" shall mean the per annum rate publicly announced by ABN
AMRO Bank N.V. from time to time at its Chicago, Illinois office. The
Prime Rate is determined by ABN AMRO Bank N.V. from time to time as a
means of pricing credit extensions to some customers and is neither
directly tied to any external rate of interest or index nor necessarily
the lowest rate of interest charged by ABN AMRO Bank N.V. at any given
time for any particular class of customers or credit extensions. Any
change in the Base Rate resulting from a change in the Prime Rate shall
become effective on the Business Day on which each change in the Prime
Rate occurs.)
"Borrower" shall have the meaning given to that term in Recital
A hereof.
"Borrower Loan Agreement" shall have the meaning given to that
term in Recital A hereof.
"Borrower Loan Documents" shall mean and include the Borrower
Loan Agreement, this Guaranty and all other documents, instruments and
agreements delivered by Borrower, Guarantor or any Subsidiary of
Guarantor in connection with the Borrower Loan Agreement.
"Business Day" shall mean any day on which commercial banks are
not authorized or required to close in San Francisco, California, New
York, New York or Tokyo.
"Capital Asset" shall mean, with respect to any Person, any
tangible fixed or capital asset owned or leased (in the case of a
Capital Lease) by such Person, or any expense incurred by such Person
that is required by GAAP to be reported as a non-current asset on such
Person's balance sheet.
"Capital Expenditures" shall mean, with respect to any Person
and any period, all amounts expended and indebtedness incurred or
assumed by such Person during such period for the acquisition of Capital
Assets (including all amounts expended and indebtedness incurred or
assumed in connection with Capital Leases).
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"Capital Leases" shall mean any and all lease obligations that,
in accordance with GAAP, are required to be capitalized on the books of
a lessee.
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"Change of Control" shall mean (a) the acquisition of beneficial
ownership by any "person" or "group" (as defined in Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended) of a direct
or indirect interest in more than thirty-three percent (33%) of the
voting power of the then outstanding capital stock of the Guarantor; or
(b) a merger or consolidation of the Guarantor with any other Person or
the merger of any other Person into the Guarantor or any other
transaction, as a result of which the stockholders of the Guarantor
immediately prior to such transaction own, in the aggregate, less than a
majority of the voting power of the outstanding capital stock of the
surviving or resulting entity; or (c) the first day on which a majority
of the members of the Board of Directors of the Guarantor are not
Continuing Directors. A "Continuing Director" shall mean any director of
the Board of Directors of the Guarantor who is either (i) a member of
such Board of Directors on the date of this Agreement or (ii) nominated
or elected to such Board of Directors with the approval of a majority of
the Continuing Directors who were members of such Board of Directors at
the time of such nomination or elections.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
"Compliance Certificate" shall have the meaning given to that
term in Subparagraph 4(a) hereof.
"Contingent Obligation" shall mean, with respect to any Person,
without duplication, (a) any Guaranty Obligation of that Person; and (b)
any direct or indirect obligation or liability, contingent or otherwise,
of that Person (i) in respect of any letters of credit, acceptances,
bank guaranties, surety bonds or similar instrument issued for the
account of that Person or as to which that Person is otherwise liable
for reimbursement of drawings, (ii) as a partner or joint venturer in
any partnership or joint venture, or (iii) incurred pursuant to any
interest rate swap, currency swap, forward, cap, floor or other similar
contract that is not entered into in connection with a bona fide hedging
operation that provides offsetting benefits to such Person. The amount
of any Contingent Obligation shall (subject, in the case of Guaranty
Obligations, to the last sentence of the definition of "Guaranty
Obligation") be deemed equal to the maximum reasonably anticipated
liability in respect thereof.
"Contractual Obligation" of any Person shall mean, any
indenture, note, lease, loan agreement, security, deed of trust,
mortgage, security agreement, guaranty, instrument, contract, agreement
or other form of contractual obligation or undertaking to which such
Person is a party or by which such Person or any of its property is
bound.
"Debt Service Coverage Ratio" shall mean, with respect to any
Person for any fiscal quarter, the ratio, determined on a consolidated
basis in accordance with
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GAAP where applicable, of;
(a) The EBITDAR of such Person and its Subsidiaries for
such quarter;
to
(b) The sum of (i) all Interest Expenses of such Person
and its Subsidiaries for such quarter, (ii) all rental expenses
for such Person and its Subsidiaries for such quarter, and (iii)
one-fourth of all principal payments on Indebtedness for
borrowed money of such Person and its Subsidiaries scheduled for
payment during the four quarters immediately succeeding the
quarter for which EBITDAR is calculated pursuant to clause (a).
"Default" shall have the meaning given to that term in the
Borrower Loan Agreement.
"Disallowed Post-Commencement Interest and Expenses" shall mean
interest computed at the rate provided in the Borrower Loan Agreement
and claims for reimbursement, costs, expenses or indemnities under the
terms of any of the Borrower Loan Documents accruing or claimed at any
time after the commencement of any Insolvency Proceeding, if the claim
for such interest, reimbursement, costs, expenses or indemnities is not
allowable, allowed or enforceable against Borrower in such Insolvency
Proceeding.
"Dollar Equivalent" shall mean , as to any amount denominated in
Yen as of any date of determination, the equivalent amount in Dollars as
determined by Agent on the basis of the Telegraphic Transfer Mid Rate
quoted by Bank of Tokyo Mitsubishi at or about 10:00 a.m. (Tokyo time)
on such date.
"Dollars" and "$" shall mean the lawful currency of the United
States of America and, in relation to any payment under this Guaranty,
same day or immediately available funds.
"EBITDAR" shall mean, with respect to any Person for any period,
the sum of the following, determined on a consolidated basis in
accordance with GAAP where applicable:
(a) The net income or net loss of such Person and its
Subsidiaries (including interest income) for such period before
provision for income taxes;
plus
(b) The sum of (i) all Interest Expenses of such Person
and its Subsidiaries accruing during such period and (ii) all
depreciation, amortization and rental expenses of such Person
and its Subsidiaries
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accruing during such period (in each case, to the extent
deducted in calculating net income or loss in clause (a) above).
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"Employee Benefit Plan" shall mean any employee benefit plan
within the meaning of section 3(3) of ERISA maintained or contributed to
by Guarantor or any ERISA Affiliate, other than a Multiemployer Plan.
"Environmental Laws" shall mean all Requirements of Law relating
to the protection of human health and the environment, including,
without limitation, all Requirements of Law, pertaining to reporting,
licensing, permitting, transportation, storage, disposal, investigation,
and remediation of emissions, discharges, releases, or threatened
releases of Hazardous Materials, chemical substances, pollutants,
contaminants, or hazardous or toxic substances, materials or wastes,
whether solid, liquid, or gaseous in nature, into the air, surface
water, groundwater, or land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling
of chemical substances, pollutants, contaminants, or hazardous or toxic
substances, materials, or wastes, whether solid, liquid, or gaseous in
nature.
"Equity Securities" of any Person shall mean (a) all common
stock, preferred stock, participations, shares, partnership interests or
other equity interests in and of such Person (regardless of how
designated and whether or not voting or non-voting) and (b) all
warrants, options and other rights to acquire any of the foregoing,
other than convertible debt securities which have not been converted
into common stock, preferred stock, participations, shares, partnership
interests or other equity interests in any such Person.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may from time to time be amended or supplemented,
including any rules or regulations issued in connection therewith.
"ERISA Affiliate" shall mean any Person which is treated as a
single employer with Guarantor under Section 414 of the Code.
"Event of Default" shall have the meaning given to that term in
the Borrower Loan Agreement.
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System.
"Financial Statements" shall mean, with respect to any
accounting period for any Person, statements of income, shareholders'
equity and cash flows of such Person for such period, and a balance
sheet of such Person as of the end of such period, setting forth in each
case in comparative form figures for the corresponding period in the
preceding fiscal year if such period is less than a full fiscal year or,
if such period is a full fiscal year, corresponding figures from the
preceding annual audit, all prepared in reasonable detail and in
accordance with GAAP.
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"Funded Debt" of any Person shall mean, without duplication, all
Indebtedness of such Person, as described in Subparagraphs (a)-(d) of
the definition of Indebtedness.
"GAAP" shall mean generally accepted accounting principles and
practices as in effect in the United States of America from time to
time, consistently applied.
"Governmental Authority" shall mean any domestic or foreign
national, state or local government, any political subdivision thereof,
any department, agency, authority or bureau of any of the foregoing, or
any other entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government, including,
without limitation, the Federal Deposit Insurance Corporation, the
Federal Reserve Board, the Comptroller of the Currency, any central bank
or any comparable authority.
"Governmental Charges" shall mean, with respect to any Person,
all levies, assessments, fees, claims or other charges imposed by any
Governmental Authority upon such Person or any of its property or
otherwise payable by such Person.
"Governmental Rule" shall mean any law, rule, regulation,
ordinance, order, code interpretation, judgment, decree, directive,
guidelines, policy or similar form of decision of any Governmental
Authority.
"Guaranteed Obligations" shall mean all loans, advances, debts,
liabilities and obligations, howsoever arising, owed by Borrower to
Agent or any Lender of every kind and description (whether or not
evidenced by any note or instrument and whether or not for the payment
of money), direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising pursuant to the terms of the
Borrower Loan Agreement or any of the other Borrower Loan Documents,
including, without limitation, all principal, interest, rent, fees,
taxes, charges, expenses, attorneys' fees and accountants' fees
chargeable to Borrower or payable by Borrower thereunder.
"Guarantor" shall have the meaning given to that term in the
introductory paragraph hereof.
"Guarantor Credit Agreement" shall mean the Credit Agreement
dated as of April 13, 1998 among Guarantor, the financial institutions
from time to time parties thereto as lenders, and ABN AMRO Bank N.V., as
agent for such financial institutions.
"Guarantor Credit Documents" shall have the meaning given to the
term "Credit Documents" under the Guarantor Credit Agreement.
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"Guaranty Obligation" shall mean, with respect to any Person,
any direct or indirect liability of that Person with respect to any
Indebtedness, lease, dividend, or other obligation (the "primary
obligations") of another Person (the "primary obligor"), including any
obligation of that Person, whether or not contingent, (a) to purchase,
repurchase or otherwise acquire such primary obligations or any property
constituting direct or indirect security therefor, or (b) to advance or
provide funds (i) for the payment or discharge of any such primary
obligation, or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or
any balance sheet item, level of income or financial condition of the
primary obligor, or (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation, or (d) otherwise to assure or hold harmless the
holder of any such primary obligation against loss in respect thereof.
The amount of any Guaranty Obligation shall be deemed equal to the
stated or determinable amount of the primary obligation in respect of
which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect
thereof.
"Hazardous Materials" shall mean all materials, substances and
wastes which are classified or regulated as "hazardous," "toxic" or
similar descriptions under any Environmental Law or which are hazardous,
toxic, harmful or dangerous to human health.
"Indebtedness" of any Person shall mean, without duplication:
(a) All obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments and all other
obligations of such Person for borrowed money;
(b) All obligations of such Person for the deferred
purchase price of property or services (including obligations
under credit facilities which secure or finance such purchase
price and obligations under synthetic leases), other than trade
payables incurred by such Person in the ordinary course of its
business on ordinary terms;
(c) All obligations of such Person under conditional
sale or other title retention agreements with respect to
property acquired by such Person (to the extent of the value of
such property if the rights and remedies of the seller or lender
under such agreement in the event of default are limited solely
to repossession or sale of such property);
(d) All obligations of such Person as lessee under or
with respect to Capital Leases;
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(e) All obligations of such Person with respect to
accounts receivable and related rights and property sold,
assigned or transferred by such Person with recourse to such
Person;
(f) All Contingent Obligations of such Person; and
(g) All Indebtedness of other Persons of the types
described in clauses (a) - (f) above to the extent secured by
(or for which any holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien in
any property (including accounts and contract rights) of such
Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness.
"Insolvency Proceeding" shall mean any case or proceeding under
the United States Bankruptcy Code or any other similar law, rule or
regulation of the United States or any jurisdiction or any other action
or proceeding for the reorganization, liquidation, appointment of a
receiver, rearrangement of debts, marshalling of assets or similar
action relating to Borrower or Guarantor, their respective creditors or
any substantial part of their respective assets, whether or not any such
case, proceeding or action is voluntary or involuntary.
"Interest Expenses" shall mean, with respect to any Person for
any period, the sum, determined on a consolidated basis in accordance
with GAAP, of all interest accruing on the Indebtedness of such Person
during such period (including interest attributable to Capital Leases).
"Investment" of any Person shall mean any loan or advance of
funds by such Person to any other Person (other than advances to
employees of such Person in the ordinary course of business), any
purchase or other acquisition of any Equity Securities or Indebtedness
of any other Person, any capital contribution by such Person to or any
other investment by such Person in any other Person (including any
Guaranty Obligations of such Person and any indebtedness of such Person
of the type described in clause (g) of the definition of "Indebtedness"
on behalf of any other Person); provided, however, that Investments
shall not include (a) accounts receivable or other indebtedness owed by
customers of such Person which are current assets and arose from sales
of inventory in the ordinary course of such Person's business, (b)
prepaid expenses of such Person incurred and prepaid in the ordinary
course of business, and (c) Capital Expenditures of such Person incurred
in the ordinary course of business.
"Lenders" shall have the meaning given to that term in the
introductory paragraph hereof.
"Lien" shall mean, with respect to any property, any security
interest, mortgage, deed of trust, pledge, lien, charge or other
encumbrance in, of, or on such property or the income therefrom,
including, without limitation, the interest
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of a vendor or lessor under a conditional sale agreement, Capital Lease
or other title retention agreement, or any agreement to provide any of
the foregoing, and the filing of any financing statement or similar
instrument under the Uniform Commercial Code or comparable law of any
jurisdiction.
"Majority Lenders" shall have the meaning given to that term in
the Borrower Loan Agreement.
"Margin Stock" shall have the meaning given to that term in
Regulation U issued by the Federal Reserve Board, as amended from time
to time, and any successor regulation thereto.
"Material Adverse Effect" shall mean a material adverse effect
on (a) the business, assets, operations or financial condition of
Guarantor and its Subsidiaries; (b) the ability of Guarantor to pay or
perform the Guaranteed Obligations in accordance with the terms of this
Guaranty and the other Borrower Loan Documents; or (c) the rights and
remedies of Agent or any Lender under this Guaranty, the other Borrower
Loan Documents or any related document, instrument or agreement.
"Material Subsidiary" shall mean, with respect to any Subsidiary
of the Guarantor, any Subsidiary whose (a) total assets exceed ten
percent (10%) of the consolidated total assets of Guarantor and its
Subsidiaries at any time or (b) gross revenues exceed five percent (5%)
of the consolidated gross revenues of Guarantor and its Subsidiaries at
any time.
"Multiemployer Plan" shall mean any multiemployer plan within
the meaning of section 3(37) of ERISA maintained or contributed to by
Guarantor or any ERISA Affiliate.
"Net Proceeds" shall mean, with respect to any sale or issuance
of any Equity Security by any Person, the aggregate consideration
received by such Person from such sale or issuance less the sum of the
actual amount of the reasonable fees and commissions payable to Persons
other than such Person or any Affiliate of such Person, the reasonable
legal expenses and the other reasonable costs and expenses directly
related to such sale or issuance that are to be paid by such Person.
"Overnight Rate" shall mean, for any amount payable in Yen on
any day, the per annum interest rate at which overnight deposits in Yen
in an amount approximately equal to such amount would be offered for
such day by ABN AMRO Bank N.V.'s Tokyo Office to major banks in the
Tokyo interbank market.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor thereto.
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"Permitted Indebtedness" shall have the meaning given to that
term in Subparagraph 5(a) hereof.
"Permitted Liens" shall have the meaning given to that term in
Subparagraph 5(b) hereof.
"Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, an
unincorporated association, a limited liability company, a joint
venture, a trust or other entity or a Governmental Authority.
"Quick Ratio" shall mean, with respect to any Person at any
time, the ratio, determined on a consolidated basis in accordance with
GAAP, of:
(a) The remainder at such time of (i) the sum of all
cash, cash equivalents (less than ninety (90) days in term),
short-term marketable securities (less than one (1) year in
term) and accounts receivable of such Person and its
Subsidiaries (less all reserves therefor) minus (ii) the sum of
(A) the aggregate amount of such cash, cash equivalents,
short-term marketable securities and accounts receivable which
are subject to any Lien or are otherwise encumbered or
restricted (to the extent such amounts do not secure a
corresponding current liability amount included in the
calculation of subpart (b) below), and (B) with respect to any
accounts receivable sold, assigned or transferred, to the extent
included under subpart (a)(i) above, the aggregate amount of any
accounts receivable representing the discounted portion of such
accounts receivable so sold, assigned or transferred;
to
(b) The sum at such time of (i) the current liabilities
of such Person and its Subsidiaries, (ii) the aggregate
principal amounts outstanding under any revolving credit
facility (including, without limitation, in the case of
Guarantor, the aggregate principal amount of all Loans then
outstanding), and (iii) in the event such Person or any of its
Subsidiaries exercises a purchase option under a synthetic lease
or a purchase payment otherwise becomes due under a synthetic
lease, the portion of any synthetic lease payment that would be
utilized to purchase the underlying property within one year of
the date of such exercise or acceleration.
"Reportable Event" shall have the meaning given to that term in
ERISA and applicable regulations thereunder.
"Requirement of Law" applicable to any Person shall mean (a) the
Articles or Certificate of Incorporation and By-laws, Partnership
Agreement or other organizational or governing documents of such Person,
(b) any Governmental
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Rule applicable to such Person, (c) any license, permit, approval or
other authorization granted by any Governmental Authority to or for the
benefit of such Person or (d) any judgment, decision or determination of
any Governmental Authority or arbitrator, in each case applicable to or
binding upon such Person or any of its property or to which such Person
or any of its property is subject.
"Senior Funded Debt" of any Person shall mean any Funded Debt
which is not Subordinated Debt.
"Senior Indebtedness" of any Person shall mean, without
duplication:
(a) all Senior Funded Debt of such Person;
(b) all Contingent Obligations of such Person;
(c) all obligations of such Person with respect to any
synthetic leases (excluding the portion of such obligations
which are irrevocably secured by cash or cash equivalents); and
(d) all obligations of such Person with respect to any
sale, transfer or assignment of accounts receivable and related
rights and property by such Person with recourse to such Person.
"Senior Indebtedness Ratio" shall mean, with respect to any
Person at any time, the ratio, determined on a consolidated basis in
accordance with GAAP, of:
(a) The total Senior Indebtedness of such Person and its
Subsidiaries at such time;
to
(b) The sum at such time of (i) the total Senior
Indebtedness and Subordinated Debt of such Person and its
Subsidiaries at such time plus (ii) the total Tangible Net Worth
of such Person and its Subsidiaries at such time.
"Subordinated Debt" shall mean, collectively, (i) Guarantor's
$310,000,000 Five Percent (5%) Convertible Subordinated Notes due 2002,
and (ii) and any other subordinated debt permitted by clause (xi) of
Subparagraph 5(a) hereof.
"Subordinated Obligations" shall have the meaning given to that
term in Paragraph 7 hereof.
"Subsidiary" of any Person shall mean (a) any corporation of
which more than 50% of the issued and outstanding Equity Securities
having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of
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such corporation shall or might have voting power upon the occurrence of
any contingency) is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries, (b)
any partnership, joint venture, or other association of which more than
50% of the equity interest having the power to vote, direct or control
the management of such partnership, joint venture or other association
is at the time owned and controlled by such Person, by such Person and
one or more of the other Subsidiaries or by one or more of such Person's
other Subsidiaries or (c) any other Person included in the Financial
Statements of such Person on a consolidated basis.
"Tangible Net Worth" shall mean, with respect to any Person at
any time, the remainder at such time, determined on a consolidated basis
in accordance with GAAP, of (a) the total assets of such Person and its
Subsidiaries minus (b) the sum (without limitation and without
duplication of deductions) of (i) the total liabilities of such Person
and its Subsidiaries, (ii) all reserves established by such Person and
its Subsidiaries for anticipated losses and expenses (to the extent not
deducted in calculating total assets in clause (a) above), and (iii) all
intangible assets of such Person and its Subsidiaries (to the extent
included in calculating total assets in clause (a) above), including,
without limitation, goodwill (including any amounts, however designated
on the balance sheet, representing the cost of acquisition of businesses
and investments in excess of underlying tangible assets), trademarks,
trademark rights, trade name rights, copyrights, patents, patent rights,
licenses, unamortized debt discount, marketing expenses, organizational
expenses, non-compete agreements and deferred research and development.
"Yen" and "(Y)" shall mean the lawful currency of Japan and, in
relation to any payment under this Guaranty, same day or immediately
available funds.
(b) Other Interpretive Provisions. Unless otherwise indicated in this
Guaranty, all accounting terms used in this Guaranty shall be construed, and all
accounting and financial computations hereunder shall be computed, in accordance
with GAAP. Headings in this Guaranty are for convenience of reference only and
are not part of the substance hereof. All terms defined in this Guaranty in the
singular form shall have comparable meanings when used in the plural form and
vice versa. References in this Guaranty to any document, instrument or agreement
(i) shall include all exhibits, schedules and other attachments thereto, (ii)
shall include all documents, instruments or agreements issued or executed in
replacement thereof and (iii) shall mean such document, instrument or agreement,
or replacement or predecessor thereto, as amended, modified and supplemented
from time to time and in effect at any given time. References in this Guaranty
to any statute or other law (A) shall include any successor statute or law, (B)
shall include all rules and regulations promulgated under such statute or law
(or any successor statute or law), and (C) shall mean such statute or law (or
successor statute or law) and such rules and regulations, as amended, modified,
codified or reenacted from time to time and in effect at any given time.
References in this Guaranty to any Person in
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a particular capacity (1) shall include any permitted successors to and assigns
of such Person in that capacity and (2) shall exclude such Person individually
or in any other capacity. The words "hereof," "herein" and "hereunder" and words
of similar import when used in this Guaranty shall refer to this Guaranty as a
whole and not to any particular provision of this Guaranty. The words "include"
and "including" and words of similar import when used in this Guaranty shall not
be construed to be limiting or exclusive.
2. GUARANTY.
(a) Payment Guaranty. Guarantor unconditionally guarantees and
promises to pay and perform as and when due, whether at stated maturity,
upon acceleration or otherwise, any and all of the Guaranteed
Obligations. If any Insolvency Proceeding relating to Borrower is
commenced, Guarantor further unconditionally guarantees and promises to
pay and perform, upon the demand of Agent, any and all of the Guaranteed
Obligations (including any and all Disallowed Post-Commencement Interest
and Expenses) in accordance with the terms of the Borrower Loan
Documents, whether or not such obligations are then due and payable by
Borrower and whether or not such obligations are modified, reduced or
discharged in such Insolvency Proceeding. This Guaranty is a guaranty of
payment and not of collection.
(b) Continuing Guaranty. This Guaranty is an irrevocable
continuing guaranty of the Guaranteed Obligations which shall continue
in effect until all obligations of the Lenders to extend credit to
Borrower have terminated and all of the Guaranteed Obligations have been
fully, finally and indefeasibly paid. If any payment on any Guaranteed
Obligation is set aside, avoided or rescinded or otherwise recovered
from Agent or any Lender, such recovered payment shall constitute a
Guaranteed Obligation hereunder and, if this Guaranty was previously
released or terminated, it automatically shall be fully reinstated, as
if such payment was never made.
(c) Independent Obligation. The liability of Guarantor hereunder
is independent of the Guaranteed Obligations, and a separate action or
actions may be brought and prosecuted against Guarantor irrespective of
whether action is brought against Borrower or any other guarantor of the
Guaranteed Obligations or whether Borrower or any other guarantor of the
Guaranteed Obligations is joined in any such action or actions.
(d) Fraudulent Transfer Limitation. If, in any action to enforce
this Guaranty, any court of competent jurisdiction determines that
enforcement against Guarantor for the full amount of the Guaranteed
Obligations is not lawful under or would be subject to avoidance under
Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code or any applicable
provision of any comparable law of any state or other jurisdiction, the
liability of Guarantor under this Guaranty shall be limited to the
maximum amount lawful and not subject to such avoidance.
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(e) Termination. Notwithstanding any termination of this
Guaranty in accordance with Paragraph 6 hereof, this Guaranty shall
continue to be in full force and effect and applicable to any Guaranteed
Obligations arising thereafter which arise because prior payments of
Guaranteed Obligations are rescinded or otherwise required to be
surrendered by Agent or any Lender after receipt.
3. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and
warrants to Agent and the Lenders as follows:
(a) Due Incorporation, Qualification, Etc. Each of Guarantor and
Guarantor's Subsidiaries (i) is a corporation duly organized, validly
existing and in good standing under the laws of its state of
incorporation; (ii) has the power and authority to own, lease and
operate its properties and carry on its business as now conducted; and
(iii) is duly qualified, licensed to do business and in good standing as
a foreign corporation in each jurisdiction where the failure to be so
qualified or licensed is reasonably likely to have a Material Adverse
Effect.
(b) Authority. The execution, delivery and performance by
Guarantor of each Borrower Loan Document executed, or to be executed, by
Guarantor and the consummation of the transactions contemplated thereby
(i) are within the power of Guarantor and (ii) have been duly authorized
by all necessary actions on the part of Guarantor.
(c) Enforceability. Each Borrower Loan Document executed, or to
be executed, by Guarantor has been, or will be, duly executed and
delivered by Guarantor and constitutes, or will constitute, a legal,
valid and binding obligation of Guarantor, enforceable against Guarantor
in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or affecting
the enforcement of creditors' rights generally and general principles of
equity.
(d) Non-Contravention. The execution and delivery by Guarantor
of the Borrower Loan Documents executed by Guarantor and the performance
and consummation of the transactions contemplated thereby do not (i)
violate any Requirement of Law applicable to Guarantor; (ii) violate any
provision of, or result in the breach or the acceleration of, or entitle
any other Person to accelerate (whether after the giving of notice or
lapse of time or both), any Contractual Obligation of Guarantor; or
(iii) result in the creation or imposition of any Lien (or the
obligation to create or impose any Lien) upon any property, asset or
revenue of Guarantor.
(e) Approvals. No consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Authority
or other Person (including, without limitation, the shareholders of any
Person) is required in connection with the execution and delivery of the
Borrower Loan Documents executed by Guarantor and the performance and
consummation of the transactions contemplated thereby, except such as
have been made or obtained and are in full force and effect.
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(f) No Violation or Default. Neither Guarantor nor any of its
Subsidiaries is in violation of or in default with respect to (i) any
Requirement of Law applicable to such Person; (ii) any Contractual
Obligation of such Person (nor is there any waiver in effect which, if
not in effect, would result in such a violation or default), where, in
each case, such violation or default is reasonably likely to have a
Material Adverse Effect. Without limiting the generality of the
foregoing, neither Guarantor nor any of its Subsidiaries (A) has
violated any Environmental Laws, (B) has any liability under any
Environmental Laws or (C) has received notice or other communication of
an investigation or is under investigation by any Governmental Authority
having authority to enforce Environmental Laws, where such violation,
liability or investigation is reasonably likely to have a Material
Adverse Effect. No Event of Default or Default has occurred and is
continuing.
(g) Litigation. No actions (including, without limitation,
derivative actions), suits, proceedings or investigations are pending
or, to the knowledge of Guarantor, threatened against Guarantor or any
of its Subsidiaries at law or in equity in any court or before any other
Governmental Authority which (i) is reasonably likely (alone or in the
aggregate) to have a Material Adverse Effect or (ii) seeks to enjoin,
either directly or indirectly, the execution, delivery or performance by
Guarantor of the Borrower Loan Documents executed by Guarantor or the
transactions contemplated thereby.
(h) Title; Possession Under Leases. Guarantor and its
Subsidiaries (i) own and have good and marketable title (without regard
to minor defects of title) to the real property owned by Guarantor and
its Subsidiaries, as reflected in the most recent Financial Statements
delivered to Agent (except those assets and properties disposed of since
the date of such Financial Statements in compliance with this Guaranty),
(ii) have valid leasehold interests in all real property leased by
Guarantor and its Subsidiaries, (iii) own and have good title (without
regard to minor defects of title) to all their other respective
properties and assets which are material to the business of Guarantor
and its Subsidiaries, as reflected in the most recent Financial
Statements delivered to Agent (except those assets and properties
disposed of since the date of such Financial Statements in compliance
with this Guaranty) and (iv) own and have good title (without regard to
minor defects of title) to all respective properties and assets acquired
by Guarantor and its Subsidiaries since such date which are material to
the business of Guarantor and its Subsidiaries (except those assets and
properties disposed of in compliance with this Guaranty). Such assets
and properties are subject to no Lien, except for Permitted Liens. Each
of Guarantor and its Subsidiaries enjoys peaceful and undisturbed
possession under all leases, except for any failure to enjoy such
possession which (alone or in the aggregate with any other such
failures) is not reasonably likely to have a Material Adverse Effect.
(i) Financial Statements. The Financial Statements of Guarantor
and its Subsidiaries which have been delivered to Agent, (i) are in
accordance with the books and records of Guarantor and its Subsidiaries,
which have been maintained in accordance with good business practice;
(ii) have been prepared in conformity with GAAP; and (iii) fairly
present the financial conditions and results of operations of Guarantor
and its Subsidiaries
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as of the date thereof and for the period covered thereby. Neither
Guarantor nor any of its Subsidiaries has any contingent obligations,
liability for taxes or other outstanding obligations which are material
in the aggregate, except as disclosed in the audited Financial
Statements of Guarantor and its Subsidiaries for the fiscal year ending
June 30, 1997, and the unaudited Financial Statements of Guarantor and
its Subsidiaries for the fiscal quarter ending March 31, 1998, furnished
by Guarantor to Agent prior to the date hereof, or in the Financial
Statements delivered to Agent and Lenders pursuant to clause (i) or (ii)
of Subparagraph 4(a) hereof.
(j) Equity Securities. As of the date of this Guaranty, the
authorized Equity Securities of Guarantor consist of ninety million
(90,000,000) shares of common stock. All outstanding Equity Securities
of Guarantor are duly authorized, validly issued, fully paid and
non-assessable. All Equity Securities of Guarantor have been offered and
sold in compliance with all federal and state securities laws and all
other Requirements of Law.
(k) No Agreements to Sell Assets, Etc. Neither Guarantor nor any
of its Subsidiaries has any legal obligation, absolute or contingent, to
any Person to sell the assets of Guarantor or any of its Subsidiaries
(other than sales in the ordinary course of business), or to effect any
merger, consolidation or other reorganization of Guarantor or any of its
Subsidiaries or to enter into any agreement with respect thereto, except
to the extent otherwise permitted pursuant to Subparagraph 5(c) and 5(d)
hereof.
(l) Employee Benefit Plans.
(i) Based on the latest valuation of each Employee
Benefit Plan that either Guarantor or any ERISA Affiliate
maintains or contributes to, or has any obligation under (which
occurred within twelve months of the date of this
representation), the aggregate benefit liabilities of such plan
within the meaning of Section 4001 of ERISA did not exceed the
aggregate value of the assets of such plan. Neither Guarantor
nor any ERISA Affiliate has any liability with respect to any
post-retirement benefit under any Employee Benefit Plan which is
a welfare plan (as defined in section 3(1) of ERISA), other than
liability for health plan continuation coverage described in
Part 6 of Title I(B) of ERISA, which liability for health plan
contribution coverage is not reasonably likely to have a
Material Adverse Effect.
(ii) Each Employee Benefit Plan complies, in both form
and operation, in all material respects, with its terms, ERISA
and the Code, and no condition exists or event has occurred with
respect to any such plan which would result in the incurrence by
either Guarantor or any ERISA Affiliate of any material
liability, fine or penalty. Each Employee Benefit Plan, related
trust agreement, arrangement and commitment of Guarantor or any
ERISA Affiliate is legally valid and binding and in full force
and effect. No Employee Benefit Plan is being audited or
investigated by any government agency or is subject to any
pending or
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threatened claim or suit. Neither Guarantor nor any ERISA
Affiliate nor any fiduciary of any Employee Benefit Plan has
engaged in a prohibited transaction under section 406 of ERISA
or section 4975 of the Code.
(iii) Neither Guarantor nor any ERISA Affiliate
contributes to or has any material contingent obligations to any
Multiemployer Plan. Neither Guarantor nor any ERISA Affiliate
has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete
or partial withdrawal from such Multiemployer Plan under Section
4201 of ERISA or as a result of a sale of assets described in
Section 4204 of ERISA. Neither Guarantor nor any ERISA Affiliate
has been notified that any Multiemployer Plan is in
reorganization or insolvent under and within the meaning of
Section 4241 or Section 4245 of ERISA or that any Multiemployer
Plan intends to terminate or has been terminated under Section
4041A of ERISA.
(m) Other Regulations. Guarantor is not subject to regulation
under the Investment Company Act of 1940, the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
any state public utilities code or to any other Governmental Rule
limiting its ability to incur indebtedness.
(n) Patent and Other Rights. Guarantor and its Subsidiaries own
or license under validly existing agreements, and have the full right to
license without the consent of any other Person (or can demonstrate to
the satisfaction of the Majority Lenders the ability to obtain or
maintain), all patents, licenses, trademarks, trade names, trade
secrets, service marks, copyrights and all rights with respect thereto,
which are material to the conduct of their businesses as now conducted.
(o) Governmental Charges and Other Indebtedness. Guarantor and
its Subsidiaries have filed or caused to be filed all tax returns which
are required to be filed by them. Guarantor and its Subsidiaries have
paid, or made provision for the payment of, all taxes and other
Governmental Charges which have or may have become due pursuant to said
returns or otherwise and all other indebtedness, except such
Governmental Charges or indebtedness, if any, which are being contested
in good faith and as to which adequate reserves (determined in
accordance with GAAP) have been provided or which are not reasonably
likely to have a Material Adverse Effect if unpaid.
(p) Margin Stock. Guarantor owns no Margin Stock which, in the
aggregate, would constitute a substantial part of the assets of
Guarantor, and no proceeds of any loan under the Borrower Loan Agreement
will be used to purchase or carry, directly or indirectly, any Margin
Stock or to extend credit, directly or indirectly, to any Person for the
purpose of purchasing or carrying any Margin Stock.
(q) Subsidiaries, etc. Set forth in Schedule 3(q) (as
supplemented by Guarantor from time to time in a written notice to Agent
and the Lenders) is a complete list of all of Guarantor's Subsidiaries,
the jurisdiction of incorporation of each, and the percentage of shares
of such Subsidiary owned directly or indirectly by Guarantor (which
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in the event there is more than one class of Equity Securities and/or
Guarantor, directly or indirectly, owns less than 100% of any Equity
Securities of such Subsidiary, such information shall list the classes
of Equity Securities and/or the number and percentage of Equity
Securities owned directly or indirectly by Guarantor). Except for such
Subsidiaries, Guarantor has no Subsidiaries, is not a partner in any
partnership or a joint venturer in any joint venture.
(r) Catastrophic Events. Neither Guarantor nor any of its
Subsidiaries and none of their properties is or has been affected by any
fire, explosion, accident, strike, lockout or other labor dispute,
drought, storm, hail, earthquake, embargo, act of God or other casualty
that is reasonably likely to have a Material Adverse Effect. There are
no disputes presently subject to grievance procedure, arbitration or
litigation under any of the collective bargaining agreements, employment
contracts or employee welfare or incentive plans to which Guarantor or
any of its Subsidiaries is a party, and there are no strikes, lockouts,
work stoppages or slowdowns, or, to the best knowledge of Guarantor,
jurisdictional disputes or organizing activities occurring or threatened
which alone or in the aggregate are reasonably likely to have a Material
Adverse Effect.
(s) Burdensome Contractual Obligations, Etc. Neither Guarantor
nor any of its Subsidiaries and none of their properties is subject to
any Contractual Obligation or Requirement of Law which is reasonably
likely to have a Material Adverse Effect.
(t) No Material Adverse Effect. No event has occurred and no
condition exists which is reasonably likely to have a Material Adverse
Effect.
(u) Accuracy of Information Furnished. None of the Borrower Loan
Documents and none of the other certificates, statements or information
furnished to Agent or any Lender by or on behalf of Borrower, Guarantor
or any of its Subsidiaries in connection with the Borrower Loan
Documents or the transactions contemplated thereby contains or will
contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
4. AFFIRMATIVE COVENANTS. Until all obligations of Agent or any Lender
to extend credit to Guarantor have terminated and all of the Guaranteed
Obligations have been fully, finally and indefeasibly paid, Guarantor shall
comply, and shall cause compliance, with the following affirmative covenants,
unless Majority Lenders shall otherwise consent in writing:
(a) Financial Statements, Reports, etc. Guarantor shall furnish
to Agent for each Lender the following, each in such form and such
detail as Agent shall reasonably request (copies of which Agent shall
promptly deliver to each Lender):
(i) As soon as available and in no event later than
fifty (50) days after the last day of each fiscal quarter of
Guarantor, a copy of the Financial Statements of Guarantor and
its Subsidiaries (prepared on a consolidated basis) for such
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quarter and for the fiscal year to date, certified by the chief
executive officer, president, chief financial officer or
treasurer of Guarantor to present fairly the financial
condition, results of operations and other information reflected
therein and to have been prepared in accordance with GAAP
(subject to normal year-end audit adjustments);
(ii) As soon as available and in no event later than one
hundred (100) days after the close of each fiscal year of
Guarantor, (A) copies of the audited Financial Statements of
Guarantor and its Subsidiaries (prepared on a consolidated
basis) for such year, prepared by independent certified public
accountants of recognized national standing acceptable to Agent,
and (B) copies of the unqualified opinions (or qualified
opinions reasonably acceptable to Agent) and management letters
delivered by such accountants in connection with all such
Financial Statements;
(iii) Contemporaneously with the quarterly and year-end
Financial Statements required by the foregoing clauses (i) and
(ii), a compliance certificate (the "Compliance Certificate") of
the chief executive officer, president, chief financial officer
or treasurer of Guarantor which (A) states that no Event of
Default and no Default has occurred and is continuing, or, if
any such Event of Default or Default has occurred and is
continuing, a statement as to the nature thereof and what action
Guarantor proposes to take with respect thereto, and (B) sets
forth, for the quarter or year covered by such Financial
Statements or as of the last day of such quarter or year (as the
case may be), the calculation of the financial ratios and tests
provided in Subparagraph 5(l) hereof;
(iv) [RESERVED];
(v) As soon as possible and in no event later than five
(5) Business Days after any officer of Guarantor knows of the
occurrence or existence of (A) any Reportable Event under any
Employee Benefit Plan or Multiemployer Plan; (B) any actual
litigation or threatened litigation which has a reasonable
likelihood of leading to actual litigation, suits, claims or
disputes against Guarantor or any of its Subsidiaries involving
potential monetary damages payable by Guarantor or its
Subsidiaries of $10,000,000 or more alone and/or $20,000,000 or
more in the aggregate; (C) any other event or condition which is
reasonably likely to have a Material Adverse Effect; or (D) any
Default or Event of Default; the statement of the president or
chief financial officer of Guarantor setting forth details of
such event, condition, Default or Event of Default and the
action which Guarantor proposes to take with respect thereto;
(vi) As soon as available and in no event later than
five (5) Business Days after they are sent, made available or
filed, copies of (A) all registration statements and reports
filed by Guarantor or any of its Subsidiaries with any
securities exchange or the Securities and Exchange Commission
(including,
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without limitation, all 10-Q, 10-K and 8-K reports); (B) all
reports, proxy statements and financial statements sent or made
available by Guarantor or any of its Subsidiaries to its
security holders; and (C) all press releases and other similar
public statements concerning any material developments in the
business of Guarantor or any of its Subsidiaries made available
by Guarantor or any of its Subsidiaries to the public generally;
(vii) Contemporaneously with any Investment by Guarantor
consisting of any purchase or other acquisition of any Equity
Securities or Indebtedness of any other Person or any capital
contribution to or any other investment in any other Person
having a value in excess of $60,000,000, a pro forma Compliance
Certificate certified by the chief executive officer, president,
chief financial officer or treasurer of Guarantor which sets
forth the calculation of the financial ratios and tests provided
in Subparagraph 5(l) hereof after giving effect to any such
Investment; and
(viii) Such other instruments, agreements, certificates,
opinions, statements, documents and information relating to the
operations or condition (financial or otherwise) of Guarantor or
its Subsidiaries, and compliance by Guarantor with the terms of
this Guaranty and the other Borrower Loan Documents as Agent may
from time to time reasonably request.
(b) Books and Records. Guarantor and its Subsidiaries shall at
all times keep proper books of record and account in which full, true
and correct entries will be made of their transactions in accordance
with GAAP, or if, with respect to any Subsidiary for which United States
accounting principles are inapplicable, generally accepted accounting
principles in the jurisdiction in which such Subsidiary is organized.
(c) Inspections. Guarantor and its Subsidiaries shall permit any
Person designated by Agent or any Lender, upon reasonable notice and
during normal business hours, to visit and inspect any of the properties
and offices of Guarantor and its Subsidiaries, to examine the books and
records of Guarantor and its Subsidiaries and make copies thereof and to
discuss the affairs, finances and accounts of Guarantor and its
Subsidiaries with, and to be advised as to the same by, their officers,
auditors and accountants, all at such times and intervals as Agent or
any Lender may reasonably request; provided, however, so long as no
Default or Event of Default has occurred and is continuing, such
inspection and examination by any Lender (other than Agent) shall be at
the expense of such Lender.
(d) Insurance. Guarantor and its Subsidiaries shall:
(i) Carry and maintain insurance of the types and in the
amounts customarily carried from time to time during the term of
this Guaranty by others engaged in substantially the same
business as such Person and operating in the same geographic
area as such Person, including, but not limited to, fire, public
liability, property damage and worker's compensation; and
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(ii) Deliver to Agent from time to time, as Agent may
request, schedules setting forth all insurance then in effect.
(e) Governmental Charges and Other Indebtedness. Guarantor and
its Subsidiaries shall promptly pay and discharge when due (i) all taxes
and other Governmental Charges prior to the date upon which penalties
accrue thereon, (ii) all indebtedness which, if unpaid, could become a
Lien upon the property of Guarantor or its Subsidiaries and (iii) all
other Indebtedness which, if unpaid, is reasonably likely to have a
Material Adverse Effect, except such Indebtedness as may in good faith
be contested or disputed, or for which arrangements for deferred payment
have been made, provided that in each such case appropriate reserves are
maintained to the reasonable satisfaction of Agent.
(f) Use of Proceeds. Borrower shall not use any part of the
proceeds of any loan under the Borrower Loan Agreement, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock
or for the purpose of purchasing or carrying or trading in any
securities under such circumstances as to involve Guarantor, any Lender
or Agent in a violation of Regulations T, U or X issued by the Federal
Reserve Board.
(g) General Business Operations. Except as permitted in
Subparagraph 5(d) hereof, each of Guarantor and its Subsidiaries shall
(i) preserve and maintain its corporate existence and all of its rights,
privileges and franchises reasonably necessary to the conduct of its
business; provided, however, that from time to time, Guarantor may, in
the ordinary course of business, dissolve any Subsidiary which is not a
Material Subsidiary, so long as both immediately before and after giving
effect to such dissolution, no Default or Event of Default shall have
occurred and be continuing, (ii) conduct its business activities in
compliance with all Requirements of Law and Contractual Obligations
applicable to such Person, the violation of which is reasonably likely
to have a Material Adverse Effect, and (iii) keep all property useful
and necessary in its business in good working order and condition,
ordinary wear and tear excepted. Guarantor shall maintain its chief
executive office and principal place of business in the United States.
(h) Pari Passu Ranking. Guarantor shall take, or cause to be
taken, all actions necessary to ensure that the obligations of Guarantor
under this Guaranty are and continue to rank at least pari passu in
right of payment with all other unsecured Senior Indebtedness of
Guarantor.
5. NEGATIVE COVENANTS. Until all obligations of Agent or any Lender to
extend credit to Guarantor have terminated and all of the Guaranteed Obligations
have been fully, finally and indefeasibly paid, Guarantor shall comply, and
shall cause compliance, with the following negative covenants, unless Majority
Lenders shall otherwise consent in writing:
(a) Indebtedness. Neither Guarantor nor any of its Subsidiaries
shall create, incur, assume or permit to exist any Indebtedness except
for the following ("Permitted Indebtedness"):
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(i) The obligations of Guarantor under the Guarantor
Credit Documents;
(ii) Indebtedness of Guarantor and its Subsidiaries
listed in Schedule 5(a) hereto and existing on the date of this
Guaranty;
(iii) Indebtedness of Guarantor and its Subsidiaries
arising from the endorsement of instruments for collection in
the ordinary course of Guarantor's or a Subsidiary's business;
(iv) Indebtedness of Guarantor and its Subsidiaries for
trade accounts payable, provided that (A) such accounts arise in
the ordinary course of business and (B) no material part of any
such account is more than ninety (90) days past due (unless
subject to a bona fide dispute and for which adequate reserves
have been established);
(v) Indebtedness of Guarantor and its Subsidiaries under
interest rate protection, currency swap and foreign exchange
arrangements, provided that all such arrangements are entered
into in connection with bona fide hedging operations and not for
speculation;
(vi) Indebtedness of Guarantor and its Subsidiaries
under purchase money loans (including any synthetic leases) and
Capital Leases incurred by Guarantor or any of its Subsidiaries
to finance the acquisition by such Person of real property,
fixtures or equipment provided that in each case, (A) such
Indebtedness is incurred by such Person at the time of, or not
later than ninety (90) days after, the acquisition by such
Person of the property so financed and (B) such Indebtedness
does not exceed the purchase price of the property so financed;
(vii) Indebtedness of Guarantor and its Subsidiaries
under initial or successive refinancings of any Indebtedness
permitted by clause (ii) above, provided that (A) the principal
amount of any such refinancing does not exceed the principal
amount of the Indebtedness being refinanced and (B) the material
terms and provisions of any such refinancing (including
maturity, redemption, prepayment, default and subordination
provisions) are no less favorable to the Lenders than the
Indebtedness being refinanced;
(viii) Indebtedness of Guarantor and its Subsidiaries
with respect to surety, appeal, indemnity, performance or other
similar bonds in the ordinary course of business;
(ix) Guaranty Obligations of Guarantor in respect of
Permitted Indebtedness of its Subsidiaries;
(x) Indebtedness of Guarantor to any of its
Subsidiaries, Indebtedness of any of Guarantor's Subsidiaries to
Guarantor or Indebtedness of any of
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Guarantor's Subsidiaries to any of Guarantor's other
Subsidiaries, provided that any Indebtedness of Guarantor to any
of its Subsidiaries and any Indebtedness of any of Guarantor's
Subsidiaries to Guarantor shall be subject to Subparagraph 5(e)
hereof;
(xi) Unsecured Indebtedness of Guarantor which is
subordinated to the obligations of Guarantor under the Guarantor
Credit Documents, provided that the payment terms, interest rate
and subordination provisions of such Indebtedness are reasonably
acceptable to "Required Lenders" under the Guarantor Credit
Agreement;
(xii) Indebtedness of Guarantor and its Subsidiaries
with respect to the sale, transfer or assignment of accounts
receivable of Guarantor and its Subsidiaries and certain rights
and property related to the collection of or constituting
proceeds of such accounts receivable, provided that such sale,
assignment or transfer is (A) in the ordinary course of
business, (B) for cash, (C) with recourse to Guarantor or such
Subsidiary in an amount not to exceed the aggregate face amount
of the accounts receivable sold and certain additional interest
charges with respect to such Indebtedness, (D) otherwise
permitted under clause (vii) of Subparagraph 5(c) hereof, and
(E) both immediately before and after giving effect to such
Indebtedness, no Default or Event of Default shall have occurred
and be continuing; and
(xiii) Other unsecured Senior Indebtedness of Guarantor
and its Subsidiaries in addition to that otherwise permitted
above, provided that both immediately before incurring and after
giving effect to such unsecured Senior Indebtedness, Guarantor
shall be in compliance with the financial covenants set forth in
Subparagraph 5(l) hereof and no other Default or Event of
Default shall have occurred and be continuing.
(b) Liens. Neither Guarantor nor any of its Subsidiaries shall
create, incur, assume or permit to exist any Lien on or with respect to
any of its assets or property of any character, whether now owned or
hereafter acquired, except for the following ("Permitted Liens"):
(i) Liens securing the obligations of Guarantor under
the Guarantor Credit Documents;
(ii) Liens listed in Schedule 5(b) hereof and existing
on the date of this Guaranty;
(iii) Liens for taxes or other Governmental Charges not
at the time delinquent or thereafter payable without penalty or
being contested in good faith, provided that adequate reserves
for the payment thereof have been established in accordance with
GAAP;
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(iv) Liens of carriers, warehousemen, mechanics,
materialmen, vendors, and landlords and other similar Liens
imposed by law incurred in the ordinary course of business for
sums not overdue or being contested in good faith, provided that
adequate reserves for the payment thereof have been established
in accordance with GAAP;
(v) Deposits under workers' compensation, unemployment
insurance and social security laws or to secure the performance
of bids, tenders, contracts (other than for the repayment of
borrowed money) or leases, or to secure statutory obligations of
surety or appeal bonds or to secure indemnity, performance or
other similar bonds in the ordinary course of business;
(vi) Zoning restrictions, easements, rights-of-way,
title irregularities and other similar encumbrances, which alone
or in the aggregate are not substantial in amount and do not
materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the business
of Guarantor or any of its Subsidiaries;
(vii) Banker's Liens and similar Liens (including
set-off rights) in respect of bank deposits;
(viii) Liens on property or assets of any corporation
which becomes a Subsidiary of Guarantor after the date of this
Guaranty, provided that (A) such Liens exist at the time the
stock of such corporation is acquired by Guarantor and (B) such
Liens were not created in contemplation of such acquisition by
Guarantor;
(ix) Judgement Liens, provided that such Liens do not
have a value in excess of $5,000,000 or such Liens are released,
stayed, vacated or otherwise dismissed within sixty (60) days
after issue or levy and, if so stayed, such stay is not
thereafter removed;
(x) Rights of vendors or lessors under conditional sale
agreements, Capital Leases or other title retention agreements
(including synthetic leases), provided that, in each case, (A)
such rights secure or otherwise relate to Permitted
Indebtedness, (B) such rights do not extend to any property
other than property acquired with the proceeds of such Permitted
Indebtedness (other than cash pledged to secure obligations
under synthetic leases in an amount not to exceed, together with
any amounts pledged under clause (xiii), $53,000,000 in the
aggregate during the term of this Guaranty, provided that both
immediately before and after giving effect to any such cash
collateralization, Guarantor shall be in compliance with the
financial covenants set forth in Subparagraph 5(l) hereof and no
other Default or Event of Default shall have occurred and be
continuing) and (C) such rights do not secure any Indebtedness
other than such Permitted Indebtedness;
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(xi) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties
and in connection with the importation of goods in the ordinary
course of Guarantor's and its Subsidiaries' businesses;
(xii) Liens securing Indebtedness which constitutes
Permitted Indebtedness under clause (vi) of Subparagraph 5(a)
provided that, in each case, such Lien (A) covers only those
assets, the acquisition of which was financed by such Permitted
Indebtedness, and (B) secures only such Permitted Indebtedness;
(xiii) Liens securing Indebtedness which constitutes
Permitted Indebtedness under clause (xii) of Subparagraph 5(a)
hereof provided that, in each case, such Lien (A) secures only
such Permitted Indebtedness, and (B) such Liens do not extend to
any assets or property other than the assets or property sold
(other than cash pledged under certain circumstances to secure
such Permitted Indebtedness in an aggregate amount not to
exceed, together with any amounts pledged under clause (x),
$53,000,000 in the aggregate during the term of this Guaranty,
provided that both immediately before and after giving effect to
any such cash collateralization, Guarantor shall be in
compliance with the financial covenants set forth in
Subparagraph 5(1) hereof and no other Default or Event of
Default shall have occurred and be continuing);
(xiv) Liens on the property or assets of any Subsidiary
of Guarantor in favor of Guarantor or any other Subsidiary of
Guarantor;
(xv) Liens incurred in connection with the extension,
renewal or refinancing of the Indebtedness secured by the Liens
described in clause (ii) or (xii) above, provided that any
extension, renewal or replacement Lien (A) is limited to the
property covered by the existing Lien and (B) secures
Indebtedness which is no greater in amount and has material
terms no less favorable to the Lenders than the Indebtedness
secured by the existing Lien; and
(xvi) Liens on insurance proceeds in favor of insurance
companies with respect to the financing of insurance premiums.
(c) Asset Dispositions. Neither Guarantor nor any of its
Subsidiaries shall sell, lease, transfer or otherwise dispose of any of
its assets or property, whether now owned or hereafter acquired, except
for the following:
(i) Sales of inventory by Guarantor and its Subsidiaries
in the ordinary course of their businesses;
(ii) Sales of surplus, damaged, worn or obsolete
equipment or inventory for not less than fair market value;
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(iii) Sales or other dispositions of Investments
permitted by clause (i) of Subparagraph 5(e) hereof for not less
than fair market value;
(iv) Sales or assignments of defaulted receivables to a
collection agency in the ordinary course of business;
(v) Licenses by Guarantor or its Subsidiaries of its
patents, copyrights, trademarks, trade names and service marks
in the ordinary course of its business;
(vi) Sales or other dispositions of assets and property
by Guarantor to any of Guarantor's Subsidiaries or by any of
Guarantor's Subsidiaries to Guarantor or any of its other
Subsidiaries, provided that the terms of any such sales or other
dispositions by or to Guarantor are terms which are no less
favorable to Guarantor then would prevail in the market for
similar transactions between unaffiliated parties dealing at
arm's length;
(vii) Sales, for cash, in the ordinary course of
business of (A) accounts receivable of Guarantor's foreign
Subsidiaries and certain rights and property of Guarantor's
foreign Subsidiaries related to the collection of or
constituting proceeds of such accounts receivable, and (B)
accounts receivable of Guarantor and certain rights and property
of Guarantor related to the collection of or constituting
proceeds of such accounts receivable in an aggregate amount not
to exceed at any time twenty percent (20%) of Guarantor's
aggregate accounts receivable, as measured at the end of each
fiscal quarter of Guarantor, and in each case with respect to
the foregoing (A) and (B), with or without recourse, at a
discount rate not to exceed twenty percent (20%); and
(viii) Other sales, leases, transfers and disposals of
assets and property (other than sales, leases, transfers and
disposals of accounts receivable and related rights and property
which shall be permitted only as expressly set forth in clause
(vii) above), provided that the aggregate value of all such
assets and property (based upon the greater of the fair market
or book value of such assets and property) so sold, leased,
transferred or otherwise disposed of in any fiscal year on a
rolling aggregate basis does not exceed ten percent (10%) of
Guarantor's Tangible Net Worth as measured at the end of each
fiscal quarter of Guarantor.
(d) Mergers, Acquisitions, Etc. Neither Guarantor nor any of its
Subsidiaries shall consolidate with or merge into any other Person or
permit any other Person to merge into it, acquire or establish any
Subsidiary or acquire all or substantially all of the assets of any
other Person, except for the following:
(i) Any wholly-owned Subsidiary of Guarantor may merge
into Guarantor or any other wholly-owned Subsidiary of
Guarantor; and
(ii) Guarantor or any wholly-owned Subsidiary of
Guarantor may (A) acquire all or substantially all of the assets
of any Person, (B) any Person may
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merge into Guarantor or any other wholly-owned Subsidiary of
Guarantor, and (C) Guarantor or any wholly-owned Subsidiary of
Guarantor may establish or acquire Subsidiaries, provided that:
(1) in the event of any merger by any Person
into Guarantor or any wholly-owned Subsidiary of
Guarantor, Guarantor or such wholly-owned Subsidiary is
the surviving entity; and
(2) both immediately prior to and after giving
effect to such merger, acquisition or establishment of a
Subsidiary (y) the aggregate cost of any such merger,
acquisition or establishment of a Subsidiary shall not
exceed the amounts permitted under clause (ii) of
Subparagraph 5(e) hereof and (z) no Default or Event of
Default shall have occurred and be continuing.
(e) Investments. Neither Guarantor nor any of its Subsidiaries
shall make any Investment except for Investments in the following:
(i) Investments in accordance with the terms of
Guarantor's Cash Investment Guidelines as in effect on the date
of this Guaranty; and
(ii) Other Investments, provided that the aggregate
amount of such other Investments plus the aggregate cost of
assets acquired, mergers consummated and Subsidiaries
established or acquired by Guarantor and its Subsidiaries
pursuant to Subparagraph 5(d) hereof does not exceed in any
fiscal year $150,000,000 for any amounts paid in cash.
(f) Dividends, Redemptions, Etc. Neither Guarantor nor any of
its Subsidiaries shall pay any dividends or make any distributions on
its Equity Securities; return any capital to any holder of its Equity
Securities as such; make any distribution of assets, Equity Securities,
obligations or securities to any holder of its Equity Securities as
such; or set apart any sum for any such purpose. Notwithstanding the
foregoing, Guarantor may purchase, redeem, retire, defease or otherwise
acquire for value any of its Equity Securities so long as both
immediately before and after such purchase, redemption or acquisition,
no Default or Event of Default shall have occurred and be continuing and
Guarantor is in compliance with each of the financial covenants set
forth in Subparagraph 5(l) hereof.
(g) Change in Business. Neither Guarantor nor any of its
Subsidiaries shall engage, either directly or indirectly through
Affiliates, in any business substantially different from its present
business; provided, however, that Subsidiaries which are not Material
Subsidiaries may operate as holding companies or special tax purpose
entities as may be necessary for the overall operation of the business
of Guarantor and its Subsidiaries, so long as the terms of this Guaranty
and the other Borrower Loan Documents would not otherwise be violated.
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(h) Indebtedness Payments, Etc. Neither Guarantor nor any of its
Subsidiaries shall amend, modify or otherwise change any of the
subordination or other provisions of any document, instrument or
agreement evidencing Subordinated Debt in a manner which adversely
affects the material rights of the Agent and Lenders. Neither the
Guarantor nor any Subsidiary shall purchase, redeem or prepay any
Subordinated Debt, now or hereafter outstanding, except for any de
minimis redemption required in connection with the conversion of any
class of Subordinated Debt into equity.
(i) ERISA. Neither Guarantor nor any ERISA Affiliate shall (i)
adopt or institute any Employee Benefit Plan that is an employee pension
benefit plan within the meaning of Section 3(2) of ERISA, (ii) take any
action which will result in the partial or complete withdrawal, within
the meanings of sections 4203 and 4205 of ERISA, from a Multiemployer
Plan, (iii) engage or permit any Person to engage in any transaction
prohibited by section 406 of ERISA or section 4975 of the Code involving
any Employee Benefit Plan or Multiemployer Plan which would subject
either Guarantor or any ERISA Affiliate to any tax, penalty or other
liability including a liability to indemnify, (iv) incur or allow to
exist any accumulated funding deficiency (within the meaning of section
412 of the Code or section 302 of ERISA), (v) fail to make full payment
when due of all amounts due as contributions to any Employee Benefit
Plan or Multiemployer Plan, (vi) fail to comply with the requirements of
section 4980B of the Code or Part 6 of Title I(B) of ERISA, or (vii)
adopt any amendment to any Employee Benefit Plan which would require the
posting of security pursuant to section 401(a)(29) of the Code, where
singly or cumulatively, the above would have a Material Adverse Effect.
(j) Transactions With Affiliates. Neither Guarantor nor any of
its Subsidiaries shall enter into any Contractual Obligation with any
Affiliate or engage in any other transaction with any Affiliate except
upon terms at least as favorable to Guarantor or such Subsidiary as an
arms-length transaction with unaffiliated Persons.
(k) Accounting Changes. Neither Guarantor nor any of its
Subsidiaries shall change (i) its fiscal year (currently July 1 through
June 30) or (ii) its accounting practices except as required by GAAP.
(l) Financial Covenants.
(i) Guarantor shall not permit its Quick Ratio during
any period set forth below to be less than the ratio set forth
opposite such period below:
March 28, 1998 - June 30, 1999 1.50 to 1.00;
Thereafter 1.35 to 1.00.
(ii) Guarantor shall not permit its Debt Service
Coverage Ratio during any period set forth below to be less than
the ratio set forth opposite such period below:
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July 1, 1999 - September 26, 1999 1.25 to 1.00;
September 27, 1999 - December 26, 1999 1.50 to 1.00;
December 27, 1999 - March 26, 2000 1.75 to 1.00;
March 27, 2000 - June 30, 2000 2.00 to 1.00;
July 1, 2000 - September 24, 2000 2.75 to 1.00;
Thereafter 3.00 to 1.00.
(iii) Guarantor shall not permit its Senior Indebtedness
Ratio during any period to be greater than 0.25 to 1.00.
(iv) Guarantor shall not permit its Tangible Net Worth
on any date of determination (such date to be referred to herein
as a "determination date") which occurs after March 29, 1998
(such date to be referred to herein as the "base date") to be
less than the sum on such determination date of the following:
(A) $450,000,000;
plus
(B) Seventy-five percent (75%) of the sum of
Guarantor's consolidated quarterly net income (ignoring
any quarterly losses) for each quarter ending after the
base date through and including the quarter ending
immediately prior to the determination date;
plus
(C) One hundred percent (100%) of the Net
Proceeds of all Equity Securities issued by Guarantor
and its Subsidiaries during the period commencing on the
base date and ending on the determination date;
plus
(D) One hundred percent (100%) of the aggregate
decrease in the total liabilities of Guarantor and its
Subsidiaries resulting from conversions of convertible
Subordinated Indebtedness or other liabilities of
Guarantor and its Subsidiaries into Equity Securities of
Guarantor and its Subsidiaries during the period
commencing on the base date and ending on the
determination date.
(v) Guarantor shall not incur a cumulative net loss
(exclusive of net income) greater than $45,000,000, determined
in accordance with GAAP, for the four quarter period commencing
on July 1, 1998 and ending on June 30, 1999.
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6. AUTHORIZATIONS, WAIVERS, ETC.
(a) Authorizations. Guarantor authorizes Agent and the Lenders,
in their discretion, without notice to Guarantor, irrespective of any
change in the financial condition of Borrower, Guarantor or any other
guarantor of the Guaranteed Obligations since the date hereof, and
without affecting or impairing in any way the liability of Guarantor
hereunder, from time to time to:
(i) Create new Guaranteed Obligations and renew,
compromise, extend, accelerate or otherwise change the time for
payment or performance of, or otherwise amend or modify the
Borrower Loan Documents or change the terms of the Guaranteed
Obligations or any part thereof, including increase or decrease
of the rate of interest thereon;
(ii) Take and hold security for the payment or
performance of the Guaranteed Obligations and exchange, enforce,
waive or release any such security; apply such security and
direct the order or manner of sale thereof; and purchase such
security at public or private sale;
(iii) Otherwise exercise any right or remedy they may
have against Borrower, Guarantor, any other guarantor of the
Guaranteed Obligations or any security, including, without
limitation, the right to foreclose upon any such security by
judicial or nonjudicial sale;
(iv) Settle, compromise with, release or substitute any
one or more makers, endorsers or guarantors of the Guaranteed
Obligations; and
(v) Assign the Guaranteed Obligations, this Guaranty or
the other Borrower Loan Documents in whole or in part to the
extent provided in the Borrower Loan Agreement and the other
Borrower Loan Documents.
(b) Waivers. Guarantor hereby waives:
(i) Any right to require Agent or any Lender to (A)
proceed against Borrower or any other guarantor of the Guaranteed
Obligations, (B) proceed against or exhaust any security received
from Borrower, Guarantor or any other guarantor of the Guaranteed
Obligations or otherwise xxxxxxxx the assets of Borrower,
Guarantor or any other guarantor of the Guaranteed Obligations or
(C) pursue any other remedy in Agent's or any Lender's power
whatsoever;
(ii) Any defense arising by reason of the application by
Borrower of the proceeds of any borrowing;
(iii) Any defense resulting from the absence, impairment
or loss of any right of reimbursement, subrogation, contribution
or other right or remedy of
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Guarantor against Borrower, any other guarantor of the
Guaranteed Obligations or any security, whether resulting from
an election by Agent or any Lender to foreclose upon security by
nonjudicial sale, or otherwise;
(iv) Any setoff or counterclaim of Borrower or any defense
which results from any disability or other defense of Borrower or
the cessation or stay of enforcement from any cause whatsoever of
the liability of Borrower (including, without limitation, the
lack of validity or enforceability of any of the Borrower Loan
Documents);
(v) Any defense based upon any law, rule or regulation
which provides that the obligation of a surety must not be
greater or more burdensome than the obligation of the principal;
(vi) Until all obligations of Agent or any Lender to
extend credit to Borrower have terminated and all of the
Guaranteed Obligations have been fully, finally and indefeasibly
paid, any right of subrogation, reimbursement, indemnification or
contribution and other similar right to enforce any remedy which
Agent, the Lenders or any other Person now has or may hereafter
have against Borrower on account of the Guaranteed Obligations,
and any benefit of, and any right to participate in, any security
now or hereafter received by Agent, any Lender or any other
Person on account of the Guaranteed Obligations;
(vii) All presentments, demands for performance, notices
of non-performance, notices delivered under the Borrower Loan
Documents, protests, notice of dishonor, and notices of
acceptance of this Guaranty and of the existence, creation or
incurring of new or additional Guaranteed Obligations and notices
of any public or private foreclosure sale;
(viii) The benefit of any statute of limitations to the
extent permitted by law;
(ix) Any appraisement, valuation, stay, extension,
moratorium redemption or similar law or similar rights for
marshalling;
(x) Any right to be informed by Agent or any Lender of the
financial condition of Borrower or any other guarantor of the
Guaranteed Obligations or any change therein or any other
circumstances bearing upon the risk of nonpayment or
nonperformance of the Guaranteed Obligations;
(xi) Until all obligations of Agent or any Lender to
extend credit to Borrower have terminated and all of the
Guaranteed Obligations have been fully, finally and indefeasibly
paid, any right to revoke this Guaranty;
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(xii) Any defense arising from an election for the
application of Section 1111(b)(2) of the United States Bankruptcy
Code which applies to the Guaranteed Obligations;
(xiii) Any defense based upon any borrowing or grant of a
security interest under Section 364 of the United States
Bankruptcy Code; and
(xiv) Any right it may have to a fair value hearing to
determine the size of a deficiency judgment following any
foreclosure on any security for the Guaranteed Obligations.
Without limiting the scope of any of the foregoing provisions of this
Xxxxxxxxx 0, Xxxxxxxxx hereby further waives (A) all rights and defenses
arising out of an election of remedies by Agent or any Lender, even
though that election of remedies, such as a nonjudicial foreclosure with
respect to security for a Guaranteed Obligation, has destroyed
Guarantor's rights of subrogation and reimbursement against Borrower by
the operation of Section 580d of the Code of Civil Procedure or
otherwise, (B) all rights and defenses Guarantor may have by reason of
protection afforded to Borrower with respect to the Guaranteed
Obligations pursuant to the antideficiency or other laws of California
limiting or discharging the Guaranteed Obligations, including, without
limitation, Section 580a, 580b, 580d, or 726 of the California Code of
Civil Procedure, and (C) all other rights and defenses available to
Guarantor by reason of Sections 2787 to 2855, inclusive, Section 2899 or
Section 3433 of the California Civil Code or Section 3605 of the
California Commercial Code.
(c) Financial Condition of Borrower, Etc. Guarantor is fully
aware of the financial condition and affairs of Borrower. Guarantor has
executed this Guaranty without reliance upon any representation,
warranty, statement or information concerning Borrower furnished to
Guarantor by Agent or any Lender and has, independently and without
reliance on Agent or any Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of the
financial condition and affairs of Borrower and of other circumstances
affecting the risk of nonpayment or nonperformance of the Guaranteed
Obligations. Guarantor is in a position to obtain, and assumes full
responsibility for obtaining, any additional information about the
financial condition and affairs of Borrower and of other circumstances
affecting the risk of nonpayment or nonperformance of the Guaranteed
Obligations and will, independently and without reliance upon Agent or
any Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own appraisals and
decisions in taking or not taking action in connection with this
Guaranty.
7. SUBORDINATION. Guarantor hereby subordinates any and all debts,
liabilities and obligations owed to Guarantor by Borrower (the "Subordinated
Obligations") to the Guaranteed Obligations as provided in this Paragraph 7.
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(a) Prohibited Payments, Etc. Until the occurrence of a Default
or an Event of Default or any default by Guarantor hereunder, Guarantor
may receive regularly scheduled payments from Borrower on account of
Subordinated Obligations. After the occurrence and during the
continuance of any Default or Event of Default or any default by
Guarantor hereunder (including the commencement and continuation of any
Insolvency Proceeding relating to Borrower), however, unless Agent
otherwise agrees, Guarantor shall not demand, accept or take any action
to collect any payment on account of the Subordinated Obligations.
(b) Prior Payment of Guaranteed Obligations. In any Insolvency
Proceeding relating to Borrower, Guarantor agrees that Agent and the
Lenders shall be entitled to receive payment of all Guaranteed
Obligations (including any and all Disallowed Post-Commencement Interest
and Expenses) before Guarantor receives payment of any Subordinated
Obligations.
(c) Turn-Over. After the occurrence and during the continuance of
any Default or Event of Default (including the commencement and
continuation of any Insolvency Proceeding relating to Borrower),
Guarantor shall, if Agent so requests, collect, enforce and receive
payments on account of the Subordinated Obligations as trustee for Agent
and the Lenders and deliver such payments to Agent on account of the
Guaranteed Obligations (including any and all Disallowed
Post-Commencement Interest and Expenses), together with any necessary
endorsements or other instruments of transfer, but without reducing or
affecting in any manner the liability of Guarantor under the other
provisions of this Guaranty.
(d) Agent Authorization. After the occurrence and during the
continuance of any Default or Event of Default or any default by
Guarantor hereunder (including the commencement and continuation of any
Insolvency Proceeding relating to Borrower), Agent is authorized and
empowered (but without any obligation to so do), in its discretion, (i)
in the name of Guarantor, to collect and enforce, and to submit claims
in respect of, Subordinated Obligations and to apply any amounts
received thereon to the Guaranteed Obligations (including any and all
Disallowed Post-Commencement Interest and Expenses), and (ii) to require
Guarantor (A) to collect and enforce, and to submit claims in respect
of, Subordinated Obligations and (B) to pay any amounts received on such
obligations to Agent for application to the Guaranteed Obligations
(including any and all Disallowed Post-Commencement Interest and
Expenses).
8. MISCELLANEOUS.
(a) Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or
upon Guarantor or Agent under this Guaranty or the other Borrower Loan
Documents shall be in writing and faxed, mailed or delivered to
Guarantor or Agent at its respective facsimile number or address set
forth below or (or to such other facsimile number or address for either
party as
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indicated in any notice given by that party to the other party). All
such notices and communications shall be effective (i) when sent by any
overnight courier service of recognized standing, on the second Business
Day following the deposit with such service; (ii) when mailed, first
class postage prepaid and addressed as aforesaid through the United
States Postal Service or registered mail through the Japanese Post
Office, upon receipt; (iii) when delivered by hand, upon delivery; and
(iv) when faxed, upon confirmation of receipt.
Agent: ABN AMRO Bank N.V.
Tokyo Branch
00X, Xxxxxxxxx XX Xxxx Xxxxxxxx
0-0-0, Xxxxxxxxx, Xxxxxx-xx
Xxxxx 000
Xxxxx
Attn: Structured Finance
Tel: 00-0-0000-0000
Fax: 00-0-0000-0000/6902
With a copy to:
ABN AMRO Bank N.V.
San Francisco International Branch
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
U.S.A.
Attn: Xxxxx X. Xxx
Tel: (000) 000-0000
Fax: (000) 000-0000
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Borrower: Xxx Research Corporation
0000 Xxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
U.S.A.
Attn: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Fax No: (000) 000-0000
(b) Payments.
(i) Guarantor shall make all payments required hereunder
to Agent, or its order, at Agent's office located at the address
set forth in Subparagraph 8(a) hereof, or at such other office as
Agent may designate, on demand, in lawful money as provided in
clause (ii) below and in same day or immediately available funds
not later than 11:00 a.m. (Tokyo time) on the date due.
(ii) Guarantor shall make all payments of the Guaranteed
Obligations hereunder in the currency in which such Guaranteed
Obligations are required to be paid by Borrower pursuant to the
Borrower Loan Documents and shall make all other payments
hereunder in Yen or Dollars, as Agent may specify; provided,
however, that, if Agent shall request Guarantor to pay any amount
hereunder which would otherwise be payable in another currency in
the lawful currency of the United States, Guarantor shall pay to
Agent the Dollar Equivalent of such amount.
(iii) If any sum due from Guarantor under this Guaranty or
any other Borrower Loan Document to which Guarantor is a party or
any order, judgment or award given or rendered in relation hereto
or thereto has to be converted from the currency (the "first
currency") in which the same is payable hereunder or thereunder
into another currency (the "second currency") for the purpose of
(A) making or filing a claim or proof against Guarantor with any
Governmental Authority, (B) obtaining an order or judgment in any
court or other tribunal or (C) enforcing any order or judgment
given or made in relation hereto, Guarantor shall, to the fullest
extent permitted by law, indemnify and hold harmless each of the
Persons to whom such sum is due from and against any loss
suffered as a result of any discrepancy between (1) the rate of
exchange used for such purpose to convert the amounts in question
from the first currency into the second currency and (2) the rate
or rates of exchange at which such Person may, using reasonable
efforts in the ordinary course of business, purchase the first
currency with the second currency upon receipt of a sum paid to
it in satisfaction, in whole or in part, of any such order,
judgment, claim or proof. The foregoing indemnity shall
constitute a separate obligation of Guarantor distinct from its
other obligations hereunder and
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shall survive the giving or making of any judgment or order in
relation to all or any of such obligations.
(iv) If any amounts required to be paid by Guarantor under
this Guaranty or any order, judgment or award given or rendered
in relation hereto remain unpaid after such amounts are due,
Guarantor shall pay interest on the aggregate, outstanding
balance of such amounts from the date due until those amounts are
paid in full at a per annum rate equal to:
(A) In the case of amounts payable in Yen, the
Overnight Rate plus two percent (2.0%), such rate to
change from time to time as the Overnight Rate shall
change; or
(B) In the case of amounts payable in Dollars, the
Base Rate plus two percent (2.00%), such rate to change
from time to time as the Base Rate shall change.
(c) Expenses. Guarantor shall pay on demand (i) all reasonable
fees and expenses, including reasonable attorneys' fees and expenses,
incurred by Agent in connection with the preparation, execution and
delivery of, and the exercise of its duties under, this Guaranty and the
preparation, execution and delivery of amendments and waivers hereunder
and (ii) all reasonable fees and expenses, including reasonable
attorneys' fees and expenses, incurred by Agent and the Lenders in
connection with the enforcement or attempted enforcement of this
Guaranty or any of the Guaranteed Obligations or in preserving any of
Agent's or the Lenders' rights and remedies (including, without
limitation, all such fees and expenses incurred in connection with any
"workout" or restructuring affecting the Borrower Loan Documents or the
Guaranteed Obligations or any bankruptcy or similar proceeding involving
Guarantor, Borrower or any of their affiliates).
(d) Waivers; Amendments. This Guaranty may not be amended or
modified, nor may any of its terms be waived, except by written
instruments signed by Guarantor and Agent. Each waiver or consent under
any provision hereof shall be effective only in the specific instances
for the purpose for which given. No failure or delay on Agent's or any
Lender's part in exercising any right hereunder shall operate as a
waiver thereof or of any other right nor shall any single or partial
exercise of any such right preclude any other further exercise thereof
or of any other right.
(e) Assignments. This Guaranty shall be binding upon and inure to
the benefit of Agent, the Lenders and Guarantor and their respective
successors and assigns; provided, however, that Guarantor may not assign
or transfer any of its rights and obligations under this Guaranty
without the prior written consent of Agent and the Lenders, and,
provided, further, that Agent or any Lender may sell, assign and
delegate their respective rights and obligations hereunder only as
permitted by the Borrower Loan Agreement. All references in this
Guaranty to any Person shall be deemed to include all permitted
successors and assigns of such Person.
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(f) Cumulative Rights, etc. The rights, powers and remedies of
Agent and the Lenders under this Guaranty shall be in addition to all
rights, powers and remedies given to Agent and the Lenders by virtue of
any applicable Governmental Rule, the Borrower Loan Agreement, any other
Borrower Loan Document or any other agreement (including any other
guaranty), all of which rights, powers, and remedies shall be cumulative
and may be exercised successively or concurrently without impairing
Agent's or any Lender's rights hereunder.
(g) Payments Free of Taxes, Etc. All payments made by Guarantor
under this Guaranty shall be made by Guarantor free and clear of and
without deduction for any and all present and future taxes, levies,
charges, deductions and withholdings. In addition, Guarantor shall pay
upon demand any stamp or other taxes, levies or charges of any
jurisdiction with respect to the execution, delivery, registration,
performance and enforcement of this Guaranty. If any taxes, levies,
charges or other amounts are required to be withheld from any amounts
payable to Agent or any Lender hereunder, the amounts so payable to
Agent or such Lender shall be increased to the extent necessary to yield
to Agent or such Lender (after payment of all such amounts) any such
amounts payable hereunder in the amounts specified in this Guaranty.
Upon request by Agent or any Lender, Guarantor shall furnish evidence
satisfactory to Agent or such Lender that all requisite authorizations
and approvals by, and notices to and filings with, governmental
authorities and regulatory bodies have been obtained and made and that
all requisite taxes, levies and charges have been paid.
(h) Partial Invalidity. If at any time any provision of this
Guaranty is or becomes illegal, invalid or unenforceable in any respect
under the law or any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions of this Guaranty nor the
legality, validity or enforceability of such provision under the law of
any other jurisdiction shall in any way be affected or impaired thereby.
(i) Governing Law, Consent to Jurisdiction, Etc.
(i) This Guaranty shall be governed by and construed in
accordance with the laws of the State of California without
reference to conflicts of law rules.
(ii) Guarantor irrevocably submits to the non-exclusive
jurisdiction of the courts of the State of California and the
courts of the United States of America located in the Northern
District of California and agrees that any legal action, suit or
proceeding arising out of or relating to this Guaranty may be
brought against such party in any such courts. Final judgment
against Guarantor in any such action, suit or proceeding shall be
conclusive and may be enforced in any other jurisdiction by suit
on the judgment, a certified or exemplified copy of which shall
be conclusive evidence of the judgment, or in any other manner
provided by law. Nothing in this Subparagraph 8(i) shall affect
the right of Agent or any Lender to commence legal proceedings or
otherwise xxx Guarantor in any other appropriate jurisdiction, or
concurrently in more than one jurisdiction, or to serve process,
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pleadings and other papers upon Guarantor in any manner
authorized by the laws of any such jurisdiction.
(iii) Guarantor irrevocably consents to service of process
of summons, complaint and other legal process in any action, suit
or proceeding arising out of or relating to this Guaranty being
made out of the courts designated in clause (ii) above by mailing
copies of the papers by registered United States air mail,
postage prepaid, to Guarantor at its address specified in
Subparagraph 8(a). In such a case, any serving party shall also
send by telex or facsimile, or have sent by telex or facsimile, a
copy of the papers to the served party. Service in the manner
provided in this clause (iii) in any such action, suit or
proceeding will be deemed personal service, will be accepted by
the served party as such and will be valid and binding upon such
party for all purposes of any such action, suit or proceeding.
(j) Jury Trial. EACH OF GUARANTOR, THE LENDERS AND AGENT, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY
ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
GUARANTY.
[The signature page follows.]
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed as
of the day and year first above written.
XXX RESEARCH CORPORATION
By:
------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
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SCHEDULE 3(g)
SUBSIDIARIES
3(q)-1
43
SCHEDULE 5(a)
EXISTING INDEBTEDNESS
5(a)-1
44
SCHEDULE 5(b)
EXISTING LIENS
5(b)-1
