Exhibit 10.4
GUARANTEE
GUARANTEE dated as of August 31, 1999 made by MASTERCARD
INTERNATIONAL INCORPORATED, a non-stock membership corporation organized under
the laws of the State of Delaware (the "Guarantor"), in favor of STATE STREET
BANK AND TRUST COMPANY OF MISSOURI, N.A., a national banking association, as
Indenture Trustee (in such capacity, the "Indenture Trustee") for the
Noteholders (the "Noteholders") under the Indenture, dated as of the date hereof
(as amended, supplemented, extended or otherwise modified from time to time, the
"Indenture"), from MCI X'Xxxxxx 1999 Trust, a Delaware business trust (the
"Borrower"), to the Indenture Trustee.
Preliminary Statement
Pursuant to the Note Purchase Agreement, dated as of the date hereof
(as amended, supplemented, extended or otherwise modified from time to time, the
"Series A Note Purchase Agreement"), the Noteholders have severally agreed to
purchase from the Borrower a $149,380,000 aggregate principal amount of its
7.36% Series A Senior Secured Notes due September 1, 2009 (the "Series A Notes,"
such term to include any such Notes issued in substitution or replacement
therefor under the Indenture), upon the terms and subject to the conditions set
forth therein, issued by the Borrower under the Indenture. The Borrower has
entered into the Series A Note Purchase Agreement for the purpose of
facilitating the financing, with the proceeds of the Series A Notes, for the
acquisition and construction of the Facility.
The Borrower will sublease the Facility to the Lessee pursuant to
the Lease, which will be assigned to the Bond Trustee for the benefit of
Bondholders, as a security for the Bonds.
The Borrower will use the proceeds of the Series A Notes, together
with other funds, to purchase the Series A Bonds. The Series A Bonds will be
endorsed to and registered in the name of the Indenture Trustee, and the rights,
privileges and benefits of the Bondholders under the Bond Indenture will be
assigned to the Indenture Trustee, in each case, for the benefit of the
Noteholders.
In the event that additional financing is needed to complete the
Facility, the Borrower may, upon request of the Lessee and the Satisfaction of
certain conditions in the Indenture and the Participation Agreement, issue its
Series B Senior Secured Notes due September 1, 2009 (the "Series B Notes," such
term to include any such Notes issued in substitution or replacement therefore
under the Indenture, and together with the Series A Notes, the "Notes"), to be
sold pursuant to a note purchase agreement substantially in the form of the
Series A Note Purchase Agreement (as amended, supplemented, extended or
otherwise modified from time to time, the "Series B Note Purchase Agreement,"
and together with the Series A Note Purchase Agreement, the "Note Purchase
Agreements").
The Borrower will use the proceeds of the Series B Notes, together
with other funds, to purchase the Series B Bonds. The Series B Bonds will be
endorsed to and registered in the name of the Indenture Trustee, and the rights,
privileges and benefits of the Bondholders
under the Bond Indenture will be assigned to the Indenture Trustee, in each
case, for the benefit of the Noteholders.
It is a condition precedent to the obligation of the Purchasers to
purchase Series A Notes from the Borrower under the Series A Note Purchase
Agreement (and, if any Series B Notes are issued and sold, it will be a
condition to the purchase thereof) that the Guarantor shall have executed and
delivered this Guarantee to the Indenture Trustee for the ratable benefit of the
Noteholders of Series A Notes and Series B Notes (if any), from time to time
Outstanding.
NOW, THEREFORE, in consideration of the premises and to induce the
Indenture Trustee to enter into the Indenture and to induce the Purchasers to
purchase the Series A Notes from the Borrower under the Series A Note Purchase
Agreement (and, if any Series B Notes are issued and sold, to induce the
purchasers thereof to purchase any such Series B Notes under the Series B Note
Purchase Agreement), the Guarantor hereby agrees with the Indenture Trustee, for
the ratable benefit of the Noteholders, as follows:
1. Defined Terms; Calculations and Computations. Capitalized terms
not otherwise defined herein shall have the meanings set forth on Annex A to the
Participation Agreement dated as of the date hereof among the Lessee, the
Lessor, the Trust Company, the Investor, the Indenture Trustee and the
Purchasers.
2. Guarantee. (a) Subject, only in the case of the Non-Guaranteed
Residual Amount, to the limitations contained in Section 2(b), the Guarantor
hereby unconditionally and irrevocably guarantees and agrees to act as a primary
obligor and as a surety to the Indenture Trustee, for the ratable benefit of the
Noteholders and their respective successors, indorsees, transferees and assigns,
with respect to the prompt and complete payment and performance by the Borrower
and the Lessee, as applicable, when due (whether at the stated maturity, by
acceleration or otherwise) of each of the following (collectively, the
"Guaranteed Obligations"): (i) the unpaid principal of and interest on the Notes
and all other obligations and liabilities of the Borrower to the Indenture
Trustee or the Noteholders (including any applicable Make Whole Premium, any
interest accruing at the then applicable rate provided in respect of the Notes
after the occurrence of an Indenture Event of Default and any such interest
accruing at the then applicable rate provided in respect of the Notes after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower or the Lessee,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred, which may arise under, out of,
or in connection with, the Note Purchase Agreements, the Notes, the Indenture,
the other Operative Agreements or any other document made, delivered or given in
connection therewith, whether on account of principal, interest, any applicable
Make Whole Premium, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including all reasonable fees and expenses of counsel to
the Indenture Trustee or to the Noteholders that are required to be paid by the
Borrower pursuant to the terms of the Note Purchase Agreements or any other
Operative Agreement), (ii) all amounts payable by the Lessee under the Lease,
including, without limitation, the Basic Rent, the Supplemental Rent, the
Maximum Residual Guarantee Amount, the Construction Termination Amount and the
Termination Value, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred, which may arise under, out of or
in connection with, the Lease, and (iii) all other amounts payable by the Lessee
under any of the Operative
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Agreements (including indemnities) to the Indenture Trustee and/or the
Noteholders or to the Lessor for the direct or indirect benefit of the Indenture
Trustee and/or the Noteholders.
(b) Anything herein or in any other Operative Agreement to the
contrary notwithstanding, the Guarantor shall not at any time be required to
make any payment hereunder in respect of the Non-Guaranteed Residual Amount: (A)
during the Construction Period, except with respect to the Guaranteed
Obligations following (i) any breach of the environmental indemnities set forth
in Section 11.1(a) of the Participation Agreement, (ii) third party Claims
(including by the Noteholders) against the Borrower caused by or resulting from
the Guarantor's own actions or failure to act (including any default in payment
under this Guarantee) other than Claims arising directly or indirectly out of
the Guarantor's (in its capacity as the Construction Agent) failure to achieve
the Completion of the Facility by the Outside Completion Date, (iii) Claims
brought by the Borrower relating to fraud, misappropriation of funds, illegal
acts, or willful misconduct on the part of the Guarantor (whether in its
capacity as the Lessee, the Guarantor or the Construction Agent) or (iv)
bankruptcy or insolvency of the Guarantor; or (B) at any time after the
Construction Period, unless at such time (i) a default under this Guarantee
(including any breach of the Guarantor's obligations to pay the entirety of all
amounts under the Notes and the Indenture due upon any acceleration thereof, but
excluding defaults relating to breaches of Article VIII and Sections 9.3 (other
than any breach of the Guarantor's payment obligations with respect to the Notes
and the Indenture, as aforesaid) through 9.7, inclusive, hereof) or (ii) a
Specified Lease Event of Default, in any case, has occurred and is continuing.
(c) The Guarantor further agrees to pay any and all expenses
(including all reasonable fees and expenses of counsel) which may be paid or
incurred by the Indenture Trustee or any Noteholder, after the occurrence and
during the continuance of an Indenture Event of Default, in enforcing, or
obtaining advice of counsel in respect of, any rights with respect to, or
collecting, any or all of the Guaranteed Obligations and/or enforcing any rights
with respect to, or collecting against, the Guarantor under this Guarantee. This
Guarantee shall remain in full force and effect until the Guaranteed Obligations
and all amounts owing hereunder are indefeasibly paid in full, notwithstanding
that from time to time prior thereto the Borrower may be free from any
Guaranteed Obligations.
(d) No payment or payments made by the Borrower, the Guarantor or
any other Person or received or collected by the Indenture Trustee or any
Noteholder from the Borrower, the Guarantor or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application at any time
or from time to time in reduction of or in payment of the Guaranteed Obligations
shall be deemed to modify, reduce, release or otherwise affect the liability of
the Guarantor hereunder. The Guarantor shall, notwithstanding any such payment
or payments, remain liable for the Guaranteed Obligations until the Guaranteed
Obligations and all amounts owing hereunder are indefeasibly paid in full.
(e) The Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to the Indenture Trustee or any Noteholder on
account of its liability hereunder, it will notify the Indenture Trustee in
writing that such payment is made under this Guarantee for such purpose.
3. No Subrogation. Notwithstanding any payment or payments made by
the Guarantor hereunder or any set-off or application of funds of the Guarantor
by any Noteholder,
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the Guarantor shall not be entitled to exercise or enforce by way of subrogation
any rights of the Indenture Trustee or any Noteholder against the Borrower or
any other Person or any collateral security or guarantee or right of offset held
by the Indenture Trustee or any Noteholder for the payment of the Guaranteed
Obligations, nor shall the Guarantor, in its capacity as Guarantor, seek or be
entitled to seek any contribution or reimbursement from the Borrower or any
other Person in respect of payments made by the Guarantor hereunder, until all
amounts owing to the Indenture Trustee and the Noteholders by the Borrower on
account of the Guaranteed Obligations and all amounts owing hereunder are
indefeasibly paid in full. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all of the Guaranteed
Obligations and all amounts owing hereunder shall not have been paid in full,
such amount shall be held by the Guarantor in trust for the Indenture Trustee
and the Noteholders, segregated from other funds of the Guarantor, and shall,
forthwith upon receipt by the Guarantor, be turned over to the Indenture Trustee
in the exact form received by the Guarantor (duly indorsed by the Guarantor to
the Indenture Trustee, if required), to be applied against the Guaranteed
Obligations, whether matured or unmatured, in such order as the Indenture
Trustee may determine in accordance with the Indenture.
4. Amendments, etc. with respect to the Guaranteed Obligations;
Waiver of Rights. The Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against the Guarantor and without notice
to or further assent by the Guarantor, any demand for payment of any of the
Guaranteed Obligations made by the Indenture Trustee or any Noteholder may be
rescinded by such party and any of the Guaranteed Obligations continued, and the
Guaranteed Obligations, or the liability of any other party upon or for any part
thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Indenture Trustee or any Noteholder, and the Indenture, the Note
Purchase Agreements and the other Operative Agreements may be amended, modified,
supplemented or terminated, in whole or in part, as the Indenture Trustee (or
the Required Holders, as the case may be) may deem advisable from time to time,
and any collateral security, guarantee or right of offset at any time held by
the Indenture Trustee or any Noteholder for the payment of the Guaranteed
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Indenture Trustee nor any Noteholder shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Guaranteed Obligations or for this Guarantee or any property subject thereto.
When making any demand hereunder against the Guarantor, the Indenture Trustee or
any Noteholder may, but shall be under no obligation to, make a similar demand
on the Borrower or any other guarantor, and any failure by the Indenture Trustee
or any Noteholder to make any such demand or to collect any payments from the
Borrower or any other guarantor or any release of the Borrower or such other
guarantor shall not relieve the Guarantor, and shall not impair or affect the
rights and remedies, express or implied, or as a matter of law, of the Indenture
Trustee or any Noteholder against the Guarantor. For the purposes hereof
"demand" shall include the commencement and continuance of any legal
proceedings.
5. Guarantee Absolute and Unconditional. The Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Guaranteed Obligations and notice of or proof of reliance by the Indenture
Trustee or any Noteholder upon this Guarantee or acceptance of this Guarantee;
the Guaranteed Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived,
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in reliance upon this Guarantee; and all dealings between the Borrower and the
Guarantor, on the one hand, and the Indenture Trustee and the Noteholders, on
the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon this Guarantee. The Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or the Guarantor with respect to the Guaranteed
Obligations. The Guarantor understands and agrees that this Guarantee shall be
construed as a continuing, absolute and unconditional guarantee and primary
obligation and surety of payment and performance without regard to (a) the
validity, regularity or enforceability of the Notes, the Indenture, the Note
Purchase Agreements or any other Operative Agreement, any of the Guaranteed
Obligations or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by the
Indenture Trustee or any Noteholder, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Borrower or the Guarantor against the
Indenture Trustee or any Noteholder, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Borrower or the Guarantor) that
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower from the Guaranteed Obligations, or of the Guarantor
under this Guarantee, in bankruptcy or in any other instance. When pursuing its
rights and remedies hereunder against the Guarantor, the Indenture Trustee and
any Noteholder may, but shall be under no obligation to, pursue such rights and
remedies as it may have against the Borrower or any other Person or against any
collateral security or guarantee for the Guaranteed Obligations or any right of
offset with respect thereto, and any failure by the Indenture Trustee or any
Noteholder to pursue such other rights or remedies or to collect any payments
from the Borrower or any such other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Borrower or any such other Person or any such collateral
security, guarantee or right of offset, shall not relieve the Guarantor of any
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Indenture
Trustee and the Noteholders against the Guarantor. This Guarantee shall remain
in full force and effect and be binding in accordance with and to the extent of
its terms upon the Guarantor and the successors and assigns thereof, and shall
inure to the benefit of the Indenture Trustee, the Noteholders and their
respective successors, indorsees, transferees and assigns, until all the
Guaranteed Obligations and the obligations of the Guarantor under this Guarantee
shall have been satisfied by indefeasible payment in full, notwithstanding that
from time to time during the term of the Indenture and the Note Purchase
Agreements the Borrower may be free from any Guaranteed Obligations.
6. Reinstatement. This Guarantee shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Guaranteed Obligations is rescinded or must otherwise be restored
or returned by the Indenture Trustee or any Noteholder upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or the
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or the
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.
7. Payments. The Guarantor hereby guarantees that payments hereunder
will be paid by the paid to the Indenture Trustee without set-off or
counterclaim in Dollars at the office of the Indenture Trustee located at One
Metropolitan Square, Suite 3900, 000 Xxxxx
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Xxxxxxxx, Xx. Xxxxx, XX 00000 which shall be distributed in accordance with
Articles 6 and 8 of the Indenture, as applicable.
8. Representations; Warranties. In order to induce the Purchasers to
enter into the Series A Note Purchase Agreement and to purchase the Series A
Notes (and, if any Series B Notes are issued and sold, to induce the purchasers
thereof to purchase any such Series B Notes under the Series B Note Purchase
Agreement), the Guarantor hereby represents and warrants to the Indenture
Trustee and each Noteholder as of the Closing Date, as follows, all of which
shall survive the execution and delivery of this Guarantee, the Indenture and
the Note Purchase Agreements and the purchase of the Notes:
8.1 Financial Condition. (i) The audited consolidated balance
sheet of the Guarantor at the end of its most recent fiscal year and the
related consolidated statements of income and comprehensive income, of
changes in equity and of cash flows of the Guarantor for the fiscal period
ended on such date, reported on by its independent public accountants, and
(ii) the unaudited consolidated balance sheet of the Guarantor at the end
of its most recent fiscal quarter and the related consolidated statements
of income and cash flows of the Guarantor for the portion of the fiscal
period ended on such date, certified as complete and correct and prepared
in accordance with GAAP (subject to normal year-end adjustments) by the
chief financial officer or treasurer of the Guarantor, copies of each of
which have heretofore been furnished to each Noteholder, are complete and
correct and present fairly (except, with respect to interim statements,
for normal year end adjustments) the consolidated financial position of
the Guarantor as of such dates, and the consolidated results of operations
and cash flows for the fiscal periods then ended and, in the case of the
statements referred to in the foregoing clause (ii), the portion of the
fiscal year through such date. All such financial statements, including
the related schedules and notes thereto in the case of statements referred
to in the foregoing clause (ii), have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except, with
respect to interim statements, for normal year-end adjustments and that
such interim statements may be condensed and exclude detailed footnote
disclosure and except as concurred with such accountants or such chief
financial officer, as the case may be, and as disclosed therein). The
Guarantor did not, as of the date of any such financial statements, have
any material obligation, contingent or otherwise, which was not reflected
in the foregoing statements or in the notes thereto and which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
8.2 No Material Change. Since the date of the most recent
financial statements identified in Section 8.1(i) (i) there has been no
occurrence which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, and (ii) other than as
disclosed in any financial statements delivered hereunder pursuant to
Section 8.1, the Guarantor has not, since such date, incurred any material
obligation, contingent or otherwise, which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
8.3 Corporate Existence; Compliance with Law. The Guarantor (a) is
a non-stock membership corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, (b)
has the corporate
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power and authority and the legal right to own and operate its
property, to lease the property it operates and to conduct the business in
which it is currently engaged (except to the extent that the failure to
possess such corporate power and authority and such legal right,
individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect), (c) is duly qualified as a foreign corporation
and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except where the failure to be so qualified,
individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect and (d) is in compliance with all Legal
Requirements (including, without limitation, CERCLA, any so-called
"Superfund" or "Superlien" law, or any applicable federal, state, local or
other statute, law, ordinance, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct
concerning, any Hazardous Substances), except to the extent that the
failure to comply therewith, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
8.4 Corporate Power: Authorization. The Guarantor has the
corporate power and authority and the legal right to make, deliver and
perform the Operative Agreements to which it is a party. The Guarantor has
taken all necessary corporate action to authorize the execution, delivery
and performance of the Operative Agreements to which it is a party. No
consent or authorization of, or filing with, any Person (including,
without limitation, any Governmental Authority) is required in connection
with the execution, delivery or performance by the Guarantor or the
validity or enforceability against the Guarantor of any Operative
Agreement to which it is a party.
8.5 Enforceable Obligations. Each of the Operative Agreements to
which it is a party has been duly executed and delivered on behalf of the
Guarantor and each of such Operative Agreements constitutes the legal,
valid and binding obligation of the Guarantor, enforceable against the
Guarantor in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law).
8.6 No Legal Bar. The performance of each Operative Agreement to
which it is a party will not violate any Legal Requirement or any
Contractual Obligation applicable to or binding upon the Guarantor or any
of its properties or assets, which violations, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect,
and will not result in the creation or imposition (or the obligation to
create or impose) any Lien (other than Liens created under the Security
Documents) on any of its properties or assets pursuant to any Legal
Requirement applicable to it or any of its Contractual Obligations.
8.7 No Material Litigation. Except as disclosed in Schedule 8.7,
no litigation, investigation known to the Guarantor or proceeding of or by
any Governmental Authority or any other Person is pending or, to its
knowledge, threatened against the Guarantor (a) with respect to the
validity, binding effect or enforceability of any Operative Agreement and
the transactions contemplated thereby, or (b) which,
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individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
8.8 Investment Company Act. The Guarantor is not an "investment
company" or a company "controlled" by an "investment company" (as each of
the quoted terms is defined or used in the Investment Company Act of 1940,
as amended).
8.9 Federal Regulation. No part of the proceeds of the sale of the
Notes will be used for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation T, U or X of the Federal
Reserve Board. The Guarantor is not engaged and will not engage,
principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" within the respective meanings of the quoted terms under said
Regulation U.
8.10 No Default. The Guarantor is not in default in the payment or
performance of any of its Contractual Obligations in any respect which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. The Guarantor is not in default under any order,
award or decree of any Governmental Authority or arbitrator binding upon
or affecting it or by which any of its properties or assets may be bound
or affected in any respect which default, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect,
and no such order, award or decree, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
8.11 No Burdensome Restrictions. The Guarantor is neither a party
to nor is bound by any Contractual Obligation or subject to any Legal
Requirement or other corporate restriction which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
8.12 Taxes. The Guarantor has filed or caused to be filed or has
timely requested an extension to file or has received an approved
extension to file all tax returns which, to the knowledge of the
Guarantor, are required to have been filed, and has paid all taxes shown
to be due and payable on said returns or extension requests or on any
assessments made against it or any of its property and all other taxes,
fees or other charges imposed on it or any of its property by any
Governmental Authority (other than those the amount or validity of which
is currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided
in the books of the Guarantor), except where the failure to make or pay
any such filings or taxes, fees or charges, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect; and, to the knowledge of the Guarantor, no claims are being
asserted with respect to any such taxes, fees or other charges (other than
those the amount or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided in the books of the Guarantor),
except where the failure to pay any such taxes, fees or other charges,
individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect. The federal income tax liabilities of the
Guarantor have been determined by the United States Internal Revenue
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Service and paid for all fiscal years up to and including the
fiscal year ended December 31, 1998.
8.13 Ownership of Property: Liens. The Guarantor has good and
marketable title to, or valid and subsisting leasehold interests in, all
its real property, and good title to all its material other property,
except to the extent the failure to have such good title or valid
leasehold interest, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect; and none of such property
is subject, except as permitted hereunder or under the other Operative
Agreements and except as, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, to any Lien
(including, without limitation, federal, state and other tax Liens).
8.14 ERISA. No "prohibited transaction" (as defined in Section 406
of ERISA or Section 4975 of the Code) or "accumulated funding deficiency"
(as defined in Section 302 of ERISA) or Reportable Event (other than a
Reportable Event with respect to which the 30-day notice requirement under
Section 4043 of ERISA has been waived) has occurred during the five years
preceding each date on which this representation is made or deemed made,
or will occur, after giving effect to the transactions contemplated by the
Operative Agreements, with respect to any Plan in any case the
consequences of which, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect. The present value of all
accrued benefits under each Single Employer Plan maintained by the
Guarantor or a Commonly Controlled Entity (based on those assumptions used
to fund such Plan) did not, as of the most recent annual valuation date in
respect of each such Plan, exceed the fair market value of the assets of
the Plan (including for these purposes accrued but unpaid contributions)
allocable to such benefits by an amount which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
The liability to which the Guarantor or any Commonly Controlled Entity
would become subject under ERISA if the Guarantor or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans
as of the valuation date most closely preceding the date hereof would not
have a Material Adverse Effect. No Multiemployer Plan is either in
Reorganization or Insolvent in any case the consequences of which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
8.15 Solvency. The Guarantor has received reasonably equivalent
value in exchange for guaranteeing the Guaranteed Obligations. The net
cash flow and the fair saleable value of the business and assets of the
Guarantor, upon giving effect to the transactions contemplated by the
Operative Agreements, shall be not less than the amount that shall be
required to pay the probable liabilities of the Guarantor (including the
Guaranteed Obligations and all contingent, fixed, subordinated,
unsubordinated, matured, unmatured, liquidated and unliquidated
liabilities) on existing debts as they may become absolute and matured.
The Guarantor is not and, upon giving effect to the transactions
contemplated by the Operative Agreements, shall not be "insolvent" (as
defined in Title 11 of the United States Code or under any applicable
state fraudulent conveyance or transfer statute, in each case as in effect
from time to time), and shall not be engaged in any business or
transaction, or about to engage in any business or transaction, for which
the Guarantor has an unreasonably small capital, and the Guarantor has no
intent (a) to
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hinder, delay or defraud any Person to which the Guarantor is, or
anticipates it shall become, indebted or (b) to incur indebtedness that
would be beyond its ability to pay as such indebtedness matures.
8.16 Disclosure. The Guarantor, through the Arranger, has
delivered to each Purchaser a copy of a Confidential Offering Memorandum
(the "Memorandum") related to the transactions contemplated by the
Operative Agreements. The Memorandum fairly describes, in all material
respects, the general nature of the business and principal properties of
the Guarantor. The Memorandum, this Guarantee and the other Operative
Agreements and any other materials delivered by or on behalf of the
Guarantor, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under
which they were made. There is no fact known to the Guarantor that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect and that has not been set forth in the Memorandum
or in the Operative Agreements delivered by or on behalf of the Guarantor.
9. Affirmative Covenants of the Guarantor. The Guarantor hereby agrees
that so long as this Guarantee is in effect and until the Guaranteed Obligations
and all amounts owing hereunder are indefeasibly paid in full it will:
9.1 Financial Statements. Furnish to the Indenture Trustee (with
sufficient copies for each Noteholder):
(a) as soon as available, but in any event within 120 days after
the end of each fiscal year of the Guarantor, a copy of the consolidated
balance sheet of the Guarantor as at the end of such year and the related
consolidated statements of income, of changes in equity and of cash flows
for such year, setting forth in each case in comparative form the figures
for the previous year, reported on (without a "going concern" or like
qualification or exception or any qualification arising out of the scope
of the audit) by independent certified public accountants of nationally
recognized standing; and
(b) as soon as available, but in any event not later than 60 days
after the end of each of the first three quarterly periods of each fiscal
year of the Guarantor, the unaudited consolidated balance sheet of the
Guarantor as at the end of such quarter and the related unaudited
consolidated statements of income, of changes in equity and of cash flows
of the Guarantor for the portion of the fiscal year through the end of
such quarter, setting forth in each case in comparative form the figures
for the previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments);
all of which financial statements shall be complete and correct in all material
respects (subject, in the case of interim statements, to normal year-end audit
adjustments) and shall be prepared in reasonable detail (except that interim
statements may be condensed and may exclude detailed footnote disclosure) and in
accordance with GAAP applied consistently throughout the periods reflected
therein and with prior periods (except as concurred with such accountants or a
Responsible Officer, as the case may be, and disclosed therein and except that
interim financial
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statements need not be restated for changes in accounting principles which
require retroactive application, and operations which have been discontinued (as
defined in Accounting Principles Board Opinion No. 30) during the current year
need not be shown in interim financial statements as such either for the current
period or comparable prior period). In the event the Guarantor changes its
accounting methods because of changes in GAAP, or any change in GAAP occurs
which increases or diminishes the protection and coverage afforded to the
Noteholders under current GAAP accounting methods, the Guarantor or the
Indenture Trustee, as the case may be, may request of the other parties to this
Guarantee an amendment of the financial covenants contained in this Guarantee to
reflect such changes in GAAP and to provide the Noteholders with protection and
coverage equivalent to that existing prior to such changes in accounting methods
or GAAP, and each of the Guarantor, the Indenture Trustee and the Noteholders
agree to consider such request in good faith.
9.2 Certificates; Other Information. Furnish to the Indenture
Trustee (with sufficient copies for each Noteholder which shall be made
available by the Indenture Trustee to any Noteholder upon request):
(a) concurrently with the delivery of the financial statements
referred to in Section 9.1(a), a letter from the Guarantor's independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary to express their
opinion on such financial statements no knowledge was obtained of any
failure by the Guarantor to comply with Section 10.1 hereof, except as
specified in such letter;
(b) concurrently with each delivery of the financial statements
referred to in Sections 9.1(a) and (b), a certificate of a Responsible
Officer of the Guarantor (i) stating that such officer has reviewed and
is familiar with this Guarantee and the other Operative Agreements and
that, to the best of such officer's knowledge, the Guarantor has
observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Guarantee, or in the other
Operative Agreements to be observed, performed or satisfied by it, and
that such officer has obtained no knowledge of any default under this
Guarantee or any Lease Default or Lease Event of Default except as
specified in such certificate, (ii) showing in detail as of the end of
the related fiscal period the figures and calculations supporting such
statement in respect of Section 10.1;
(c) promptly upon receipt thereof, copies of all final reports
submitted to the Guarantor by independent certified public accountants
in connection with each annual, interim or special audit of the books of
the Guarantor made by such accountants;
(d) promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent or made available
generally by the Guarantor and all regular and periodic reports and all
final registration statements and final prospectuses, if any, filed by
the Guarantor with any securities exchange or with the Securities and
Exchange Commission or any Governmental Authority succeeding to any of
its functions; and
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(e) promptly, such additional financial and other information as
any Noteholder may from time to time reasonably request.
9.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all of
its obligations and liabilities of whatever nature, except (a) when the amount
or validity thereof is currently being contested in good faith by appropriate
proceedings and adequate reserves in conformity with GAAP with respect thereto
have been established on the books of the Guarantor, (b) for delinquent
obligations which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect and (c) for trade and other accounts
payable in the ordinary course of business in accordance with customary trade
terms and which are not overdue for a period of more than 120 days (or any
longer period if longer payment terms are accepted in the ordinary course of
business) or, if overdue for more than 120 days (or such longer period), as to
which a good faith dispute exists and is diligently being contested and adequate
reserves in conformity with GAAP have been established on the books of the
Guarantor.
9.4 Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by it, and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except for rights,
privileges and franchises the loss of which, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect; and comply
with all applicable Legal Requirements except to the extent that the failure to
comply therewith, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
9.5 Maintenance of Property: Insurance. (a) Keep all property useful
and necessary in its business (other than the Facility, for which the provisions
of the Lease shall apply) in good working order and condition (ordinary wear and
tear excepted); and
(b) Maintain with financially sound and reputable insurance
companies insurance on all its property (other than the Facility, for
which the provisions of the Lease shall apply) in at least such amounts
and with only such deductibles as are usually maintained by, and against
at least such risks as are usually insured against in the same general
area by, companies engaged in the same or a similar business; provided
that the Guarantor may implement programs of self insurance in the
ordinary course of business and in accordance with industry standards
for a company of similar size so long as reserves are maintained in
accordance with GAAP for the liabilities associated therewith.
9.6 Inspection of Property; Books and Records; Discussions. Keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and activities
which permit financial statements to be prepared in conformity with GAAP and all
Legal Requirements; and permit representatives of the Indenture Trustee or any
Noteholder that is an Institutional Investor upon reasonable notice to visit and
inspect (at the expense of the Noteholders
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unless there is an occurrence and continuance of an Event of Default, in which
case, at the expense of the Guarantor) any of its properties and examine and
make summaries (but not copies) from any of its books and records at any
reasonable time and as often as may reasonably be desired upon reasonable
notice, and to discuss the business, operations, properties and financial and
other condition of the Guarantor with officers and employees thereof and with
their independent certified public accountants (and by this provision, the
Guarantor authorizes such accountants to discuss the affairs, finances and
accounts of the Guarantor).
9.7 Notices. Promptly give notice to the Indenture Trustee and each
Noteholder:
(a) of the occurrence of any Indenture Default or Indenture Event
of Default other than an Independent Default, and occurrence of any
Independent Default of which it has notice;
(b) of any (i) default or event of default under any instrument or
other agreement, guarantee or collateral document of the Guarantor which
default or event of default, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, or (ii)
litigation, investigation or proceeding which may exist at any time
between the Guarantor and any Governmental Authority, or receipt of any
notice of any environmental claim or assessment against the Guarantor by
any Governmental Authority, which in any such case, individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect;
(c) of any litigation or proceeding affecting the Guarantor (i) in
which more than $1,000,000 of the amounts claimed, aggregating such
amounts with respect to all claims in such litigations and proceedings,
is not covered by insurance or (ii) in which injunctive or similar
relief is sought which if obtained, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect;
(d) of the following events, as soon as practicable after, and in
any event within 30 days after, the Guarantor knows thereof: (i) the
occurrence of any Reportable Event with respect to any Single Employer
Plan which Reportable Event, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, or (ii) the
institution of proceedings or the taking of any other action by PBGC,
the Guarantor or any Commonly Controlled Entity to terminate, withdraw
from or partially withdraw from any Plan and, with respect to a
Multiemployer Plan, the Reorganization or Insolvency of such Plan, in
each of the foregoing cases which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, and in
addition to such notice, deliver to the Indenture Trustee and each
Noteholder whichever of the following may be applicable: (A) a
certificate of the controller or treasurer of the Guarantor setting
forth details as to such Reportable Event and the action that the
Guarantor or such Commonly Controlled Entity proposes to take with
respect thereto, together with a copy of any notice of such Reportable
Event that may be required to be filed
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with PBGC, or (B) any notice delivered by PBGC evidencing its
intent to institute such proceedings or any notice to PBGC that such
Plan is to be terminated, as the case may be; and
(e) of any event that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section 9.7 shall be accompanied by a
statement of the controller or treasurer of the Guarantor setting forth
details of the occurrence referred to therein and stating what action the
Guarantor proposes to take with respect thereto.
10. Negative Covenants. The Guarantor hereby agrees that so long as
this Guarantee is in effect and until the Guaranteed Obligations and all amounts
owing hereunder are indefeasibly paid in full, the Guarantor shall not, at any
time, directly or indirectly:
10.1 Consolidated Net Worth. Permit Consolidated Net Worth at
any time to be less than (a) $182,108,000 plus (b) 50% of its
Consolidated Net Income (but only if positive) for each fiscal quarter,
for the period beginning on the first day of the first full fiscal
quarter following the Closing Date and ending on the last day of the
fiscal quarter for which financial statements have been most recently
delivered to the Indenture Trustee pursuant to Section 9.1.
10.2 Fundamental Changes. Consolidate with or merge with, or
convey, transfer or lease all or substantially all of its assets in a
single transaction or series of transactions to, any Person; provided
that the foregoing restrictions shall not apply to the consolidation or
merger of the Guarantor with, or conveyance, transfer or lease of all or
substantially all of the assets of the Guarantor in a single transaction
or series of transactions to, any Person so long as:
(a) the successor formed by such consolidation or the survivor
of such merger or the Person that acquires by conveyance, transfer or
lease all or substantially all of the assets of the Guarantor as an
entirety, as the case may be (the "Successor Guarantor"), shall be a
solvent corporation organized under the laws of the United States of
America, any state thereof or the District of Columbia;
(b) each such corporation shall have executed and delivered to
the Indenture Trustee and the Noteholders its assumption of the due and
punctual performance and observance of each covenant and condition of
this Guarantee and each other Operative Agreement to which the Guarantor
is a party;
(c) after giving effect to such transaction, the respective
senior unsecured debt credit ratings of the Successor Guarantor by S&P
and Xxxxx'x shall be no less than such ratings immediately before giving
effect to such transaction; and
(d) immediately before and after giving effect to such
transaction, no Indenture Default or Indenture Event of Default or any
default under this Guarantee would exist.
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10.3 ERISA. Use moneys from any Plan established by the
Guarantor or for the benefit of the Guarantor's employees to perform any
of the Guarantor's obligations under this Guarantee or any other
Operative Agreements, nor will the Guarantor transfer its interests in
the Collateral to any such Plan. The Guarantor will not, and will not
permit any ERISA Affiliate to, withdraw from any Multiemployer Plan or
permit any Plan maintained by it or for the benefit of its employees to
be terminated if such withdrawal or termination would result in
withdrawal liability (as described in Part I of Subtitle E of Title IV
of ERISA) or the imposition of a Lien on the Collateral pursuant to
Section 4068 of ERISA.
11. Authority of Indenture Trustee. The Guarantor acknowledges that
the rights and responsibilities of the Indenture Trustee under this Guarantee
with respect to any action taken by the Indenture Trustee or the exercise or
non-exercise by the Indenture Trustee of any option, right, request, judgment or
other right or remedy provided for herein or resulting or arising out of this
Guarantee shall, as between the Indenture Trustee and the Noteholders, be
governed by the Indenture and by such other agreements with respect thereto as
may exist from time to time among them, but, as between the Indenture Trustee
and the Guarantor, the Indenture Trustee shall be conclusively presumed to be
acting as agent for the Noteholders with full and valid authority so to act or
refrain from acting, and the Guarantor shall not be under any obligation, or
entitlement, to make any inquiry respecting such authority.
12. Notices. All notices, requests and demands to or upon the
Indenture Trustee, any Noteholder or the Guarantor to be effective shall be in
writing (including by telecopy or telex), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when delivered
in person or by mail, postage prepaid, by Federal Express or other reliable
24-hour delivery service, or, in the case of facsimile, when received, addressed
as follows:
(a) if to the Indenture Trustee or any Noteholder, at its address or
transmission number for notices provided in Section 11.5 of the Indenture and
Schedule A of the Note Purchase Agreements, respectively; and
(b) if to the Guarantor, at its address or transmission number for
notices set forth opposite its signature below.
The Indenture Trustee, each Noteholder and the Guarantor may change
its address and transmission numbers for notices by notice in the manner
provided in this Section 12.
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13. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14. Integration. This Guarantee represents the agreement of the
Guarantor with respect to the subject matter hereof and there are no promises or
representations by the Indenture Trustee or any Noteholder relative to the
subject matter hereof not reflected herein.
15. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None
of the terms or provisions of this Guarantee may be waived, amended,
supplemented or otherwise modified except as provided in Section 11.1 of the
Indenture.
(b) Neither the Indenture Trustee nor any Noteholder shall by any
act (except by a written instrument pursuant to Section 15(a) hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Indenture Default or Indenture Event of
Default or in any breach of any of the terms and conditions hereof. No failure
to exercise, nor any delay in exercising, on the part of the Indenture Trustee
or any Noteholder, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Indenture Trustee or any
Noteholder of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Indenture Trustee or such
Noteholder would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
16. Section Headings. The section headings used in this Guarantee
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
17. Successors and Assigns. This Guarantee shall be binding upon the
successors and assigns of the Guarantors and shall inure to the benefit of the
Indenture Trustee, the Noteholders and their successors and assigns.
18. SUBMISSION TO JURISDICTION: WAIVERS. (a) THE GUARANTOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY:
(i) SUBMITS IN ALL LEGAL ACTIONS OR PROCEEDINGS RELATING TO THIS
GUARANTEE OR ANY OTHER OPERATIVE AGREEMENT TO WHICH IT IS A PARTY, OR
FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO
THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE SUPREME COURT OF THE STATE
OF NEW YORK AND THE APPELLATE COURTS THEREOF AND THE FEDERAL COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK;
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(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT
IN SUCH COURT, WAIVES ANY OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT AND WAIVES
ANY OBJECTION THAT SUCH ACTION OR PROCEEDING IN ANY SUCH COURT WAS
BROUGHT IN AN INCONVENIENT FORUM AND AGREES NOT TO PLEAD, CLAIM OR
ASSERT THE SAME;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT MAY BE EFFECTED BY MAILING A COPY THEREOF
BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF
MAIL), POSTAGE PREPAID TO, OR BY PERSONAL SERVICE AT, ITS ADDRESS SET
FORTH HEREIN OR SUCH OTHER ADDRESS OF WHICH THE INDENTURE TRUSTEE SHALL
HAVE BEEN NOTIFIED PURSUANT HERETO, WHETHER OR NOT SUCH ADDRESS BE
WITHIN THE JURISDICTION OF ANY SUCH COURT;
(iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT OF THE INDENTURE TRUSTEE (AND NOT OF THE GUARANTOR) TO XXX IN
ANY OTHER JURISDICTION; AND
(v) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO ANY OPERATIVE AGREEMENT OR RELATED DOCUMENT OR TRANSACTION
ANY SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES.
(b) THE GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE OR ANY OTHER
OPERATIVE AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
(c) THE GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES THE
RIGHT TO ASSERT, ARGUE OR RAISE, IN ANY ACTION BROUGHT BY THE INDENTURE TRUSTEE
AGAINST THE GUARANTOR UNDER THIS GUARANTEE, THAT THE INDENTURE TRUSTEE OR THE
NOTEHOLDERS STRUCTURED THE TRANSACTION CONTEMPLATED BY THE OPERATIVE AGREEMENTS
IN SUCH A MANNER PRIMARILY TO CIRCUMVENT ANY ONE-FORM-OF-ACTION OR
ANTI-DEFICIENCY LAWS.
(d) The Guarantor hereby waives all of the Guarantor's rights of
subrogation, reimbursement, contribution or in respect of suretyship and any
other rights and defenses available to the Guarantor, including (a) any defenses
the Guarantor may have to the obligations undertaken by the Guarantor in this
Guarantee by reason of an election of remedies by any Noteholder and (b) any
rights or defenses the Guarantor may have by reason of protection afforded by
the Borrower with respect to the obligations guaranteed hereby pursuant to the
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antideficiency, bankruptcy, insolvency or other similar laws limiting or
discharging the Borrower's Indebtedness. The Guarantor's waiver of defenses
under clause (c) above is made even though an election of remedies by any
Noteholder, such as a nonjudicial foreclosure with respect to security for a
guaranteed obligation, may extinguish the Guarantor's rights of subrogation and
reimbursement against the Borrower. The foregoing waivers shall not be deemed a
waiver of the defense that the Guaranteed Obligations have been indefeasibly
paid in full. To the extent of any inconsistency between the provisions of this
Section 18(d) and Section 3, the provisions of Section 3 shall control.
19. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF YORK, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES WHICH MAY REQUIRE THE APPLICATION OF LAWS OF
ANOTHER STATE.
20. Right of Set-Off. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Indenture Event of
Default, the Indenture Trustee and each Noteholder are hereby authorized at any
time or from time to time, without presentment, demand, protest or other notice
of any kind to the Borrower, the Guarantor or any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and apply any and
all deposits (general or special) and any other Indebtedness at any time held or
owing by the Indenture Trustee or such Noteholder (including, without
limitation, by branches and agencies of the Indenture Trustee or such Noteholder
wherever located) to or for the credit or the account of the Guarantor against
and on account of the obligations and liabilities of the Guarantor hereunder or
under any of the other Operative Agreements, and all other claims if any nature
or description arising out of or connected with this Guarantee or any other
Operative Agreement, irrespective of whether the Indenture Trustee or such
Noteholder shall have made any demand hereunder and although said obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
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IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be
duly executed and delivered by its duly authorized officer as of the day and
year first above written.
MASTERCARD INTERNATIONAL INCORPORATED
By: /s/Xxxxxxx X. Timk
--------------------------------------
Name: Xxxxxxx X. Timk
Title: VP and Assist. Secretary
Address for Notices
MasterCard International Incorporated
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attention: General Counsel
with a copy to:
MasterCard International Incorporated
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attention: Treasurer
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