EXHIBIT 10.13
GUARANTEE AGREEMENT
This Guarantee Agreement dated as of August 22, 1994 by and between the
Connecticut Development Authority, a body politic and corporate, constituting a
public instrumentality and political subdivision of the State of Connecticut,
with its principal office at 000 Xxxxx Xxxxxx, Xxxxxxxx 0, Xxxxx Xxxx,
Xxxxxxxxxxx 00000 (the "Authority") and The Bank of New York, a banking
corporation organized under the laws of New York with an office at 000 Xxxx
Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000 ("Lender").
RECITALS
WHEREAS, the Authority wishes to stimulate additional lending by banks
and other institutional lenders to manufacturing and other businesses located in
the State of Connecticut (the "State") to preserve and promote development and
create and maintain employment in the State; and
WHEREAS, Section 32-261 et seq. of the Connecticut General Statutes, as
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amended by Connecticut Public Act 93-360 (as so amended, the "Act"), authorized
the Authority to issue to eligible institutions guarantees of loans and other
investments made by such institutions in order (i) to encourage the growth and
retention of manufacturing firms and other businesses in the State that are
unable to obtain financing on reasonable terms and conditions due to the
contraction in liquidity in the banking system, (ii) to stimulate the growth and
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retention of jobs, the development of all geographic regions in the State and
the increase in State and municipal tax revenue, and (iii) to address concerns
with the availability of financing which has been discontinued subsequent to a
merger, takeover or liquidation of a financial institution; and
WHEREAS, the Authority has established a loan guarantee program (the
"Guarantee Program"), whereby the Authority provides partial guarantees of loans
made by certain banks and other institutional lenders to businesses in the
State; and
WHEREAS, the Authority has issued its Guidelines, which set forth the
procedures by which guarantees can be obtained from the Authority under the
Guarantee Program and the criteria by which the Authority shall decide whether a
particular loan is eligible for such a guarantee; and
WHEREAS, TSI International Software Ltd. (the "Borrower") desires that
the Lender extend it a loan in an amount of up to $4,000,000 (the "Lender
Loan"); and
WHEREAS, Lender is willing to make the Lender Loan pursuant to a Credit
Agreement between the Borrower and the Lender of even date herewith (as amended,
modified or supplemented from time to time as permitted by the terms hereof the
"Lender Loan Agreement") , upon satisfaction of certain conditions; and
WHEREAS, the Borrower has entered into a Security Agreement with the
Lender of even date herewith (the "Lender Security Agreement") pursuant to which
the Borrower has granted a security
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interest in all of its property to the Lender to secure the repayment of its
obligations under the Lender Loan Agreement; and
WHEREAS, it is a condition to the Lender's providing the Lender Loan
that the Authority guarantee a portion of the Lender Loan.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definitions. Unless the context shall clearly
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indicate some other meaning or may otherwise require, the terms defined in this
Section 1 shall, for all purposes hereof, have the meanings herein specified.
"Act" shall have the meaning provided in the recitals hereto.
"Authority" shall have the meaning provided in the first paragraph
hereof.
"Authority Cure Period" shall have the meaning provided in Section 9
hereof.
"Benefit Period" shall have the meaning provided in Section 18 hereof.
"Borrower" shall have the meaning provided in the recitals hereto.
"Business Day" shall mean each day, which is not a Saturday or Sunday,
on which banking institutions in the City of Hartford, Connecticut and New York,
New York are not authorized or obligated by law to close.
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"Commitment" shall mean the Authority's commitment letter dated July 18,
1994, setting forth the conditions to the issuance of its Guarantee of the
Lender Loan, and the terms of such Guarantee.
"Cure Termination Event" shall have the meaning provided in Section 9
hereof.
"Estimated Loss" shall have the meaning provided in Section ID hereof.
"Event of Default" shall have the meaning provided in Section 9 hereof.
"Fee Percentage" shall have the meaning provided in Section 14 hereof.
"Guarantee" shall mean this agreement of the Authority to guarantee a
portion of the Lender Loan under the Guarantee Program.
"Guarantee Amount" shall mean, with respect to the Lender Loan at any
time, an amount equal to that portion of the Lender Loan as to which the
Guarantee then is in effect, as determined in accordance with the provisions of
Section 8 hereof.
"Guarantee Program" shall have the meaning provided in the recitals
hereto.
"Guarantee Request" shall mean, with respect to the Lender Loan, the
documentation delivered by the Lender to the Authority pursuant to the
Guidelines, describing the terms of the Lender Loan and requesting the issuance
by the Authority of this Guarantee.
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"Guidelines" shall mean the Eligibility Guidelines, Participation
Guidelines, Loan Presentation Guidelines and Underwriting Guidelines by Loan
Size, all of which have been delivered by the Authority to the Lender.
"Lender" shall have the meaning provided in the first paragraph hereof.
"Lender Loan" shall mean the $4,000,000 revolving credit loan made to
the Borrower pursuant to the Lender Loan Agreement.
"Lender Loan Agreement" shall have the meaning provided in the recitals
hereto.
"Lender Loan Documents" shall mean the Lender Loan Agreement, the Lender
Security Agreement, and any other documents which create, evidence, secure or
guarantee the Lender Loan.
"Liquidation Costs" shall mean, with respect to the Lender Loan, all
costs and expenses, including reasonable attorneys' fees, incurred by Lender in
(i) collection of any sums owing under the Lender Loan Documents, (ii)
foreclosure against any collateral securing the Lender Loan or otherwise
enforcing its rights or remedies under the Lender Loan Documents, (iii) any act
to protect or sustain any lien created under any of the Lender Loan Documents
(other than any such act that may be required by reason of the gross negligence
of Lender with respect to the execution, delivery, filing or recording of any of
the Lender Loan Documents), or (iv) any suit, litigation, arbitration,
proceeding or controversy arising from or in connection with the enforcement of
the Lender Loan Documents or the exercise of
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Lender's rights thereunder; provided, however, that, except as provided below,
Liquidation Costs for the Lender Loan shall not, without the prior written
consent of the Authority (which consent will not be unreasonably withheld or
delayed), exceed, in the aggregate, the lesser of (i) ten percent (10%) of the
outstanding principal balance of the Lender Loan at the time of maturity or
acceleration, as the case may be, and (ii) $50,000. In the event that Lender
requests that the Authority consent to Lender's incurring Liquidation Costs in
excess of such amount, such consent shall not be unreasonably withheld or
delayed so long as the proposed expenditures are reasonable and consistent with
the usual practices of Lender in similar circumstances.
"Out-of-State Relocation" shall have the meaning provided in Section 18
hereof.
"Recoveries" shall have the meaning provided in Section 11 hereof.
"Scheduled Amortization Loan Balance" shall mean, for the Lender Loan,
initially, the maximum authorized principal amount of the Lender Loan and
thereafter to be reduced on each scheduled renewal date (if any) for the Lender
Loan by an amount equal to the product of (i) such maximum authorized principal
amount, multiplied by (ii) twenty percent (20%).
"Security Filings" shall have the meaning provided in Section 3 hereof.
"State" shall have the meaning provided in the recitals hereto.
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"Total Indebtedness" shall have the meaning provided in Section 11
hereof.
Section 2. The Authority Guarantee. Subject to the terms of this
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Guarantee, the Authority hereby guarantees to Lender payment of a portion of the
principal of, interest on, and Liquidation Costs with respect to the Lender
Loan, which portion equals, at any given time, the Guarantee Amount at such
time. In no event shall the Authority be liable hereunder in an amount greater
than the Guarantee Amount as of the date Lender notifies the Authority of the
Event of Default under Section 9 hereof.
Notwithstanding any other provisions of this Guarantee, any payments
made by the Authority pursuant to this Guarantee shall not be deemed to
constitute payments made on the Lender Loan, but rather shall constitute a
purchase by the Authority of a junior and subordinate participation in the
Lender Loan equal to the amount of such payment, and the Borrower shall not be
discharged or released from any of its obligations under the Lender Loan
Documents by virtue of such payment by the Authority.
Section 3. Lender Loan Closing. Prior to closing the Lender Loan,
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Lender shall provide a fully executed copy of the Lender Loan Documents to
counsel for the Authority, in order for such counsel to confirm on behalf of the
Authority that the Lender Loan Documents are consistent with the Guarantee
Request and the Commitment and are adequate to fully protect and preserve
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the interests of the Authority with respect to the Lender Loan. Upon
satisfactory review of such Lender Loan Documents by counsel to the Authority,
the Lender Loan Documents shall be deemed to be in accordance with the terms and
conditions set forth in the Guarantee Request and Commitment for the Lender Loan
unless Lender (i) modifies any of the approved documents other than as permitted
elsewhere in this Guarantee, (ii) is grossly negligent in (A) closing the Lender
Loan in a manner inconsistent with the Guarantee Request and Commitment or (B)
acting in a manner which jeopardizes the enforceability of the Lender Loan
Documents, or (iii) fails to file or cause to be filed such financing
statements, mortgages and other security documents (collectively the "Security
Filings") as have been reviewed and approved by counsel to the Authority in the
offices or with the authorities noted on the Security Filings, or file such
continuation statements, mortgages and other security documents as are necessary
to perfect and preserve, with the requisite degree of priority, the liens or
security interests evidenced by the Security Filings. If (i), (ii) or (iii)
shall occur, the Authority may exercise its rights under Section 15 hereof.
Lender Loan Documents shall include an opinion of Borrower's counsel
satisfactory to Authority counsel, which shall provide that it may be relied
upon by any participant in or purchaser of the Lender Loan, including the
Authority. Execution and delivery by the Authority of this Guarantee shall be
deemed conclusive evidence of such satisfactory review by counsel to the
Authority
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and of the approval of the closing activities to the time of the delivery of
this Guarantee.
Promptly after closing, Lender shall deliver a copy of the Lender Loan
Documents to the Authority. The Authority shall be entitled at any time during
regular business hours, upon reasonable advance written notice to the Lender,
to inspect any of the Lender Loan Documents or other documents relating to the
Lender Loan which are in the Lender's possession, including without limitation,
repayment records.
Section 4. Lender Loan Servicing. Lender shall have the sole right
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to service the Lender Loan at all times except as provided in Section 12.
Lender shall exercise substantially the same care in administering, servicing
and managing the Lender Loan as it exercises with respect to similar loans made
or held by Lender, and will employ its customary practices to collect all
payments from the Lender Loan and will perform all customary servicing
responsibilities with respect to the Lender Loan. Lender's customary and usual
servicing practices include, without limitation, (i) the receipt and review of
financial statements; (ii) the receipt and review of insurance policies, reports
and certificates; (iii) inspection of plant, property and equipment; and (iv)
monitoring of assets taken as collateral.
Section 5. Reports to the Authority. Within fifteen days from the
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last day of each December, March, June and September,
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Lender shall provide the Authority with a quarterly report for the quarter
ending on such day with respect to the Lender Loan, in the form attached hereto
as Exhibit A.
Lender shall deliver to the Authority, promptly after receipt of a
written request by the Authority, copies of all financial statements, insurance
policies and certificates, environmental reports, accounts receivable and
inventory reports, and other material documentation as shall have been delivered
by or on behalf of the Borrower, to the extent retained by the Lender. Lender
shall also provide the Authority with a copy of each and every written notice of
demand, acceleration or default, legal summons or process sent to or served upon
the Borrower by the Lender and every other written communication to or from the
Borrower which, in Lender's reasonable judgment, materially and adversely
affects any interest of the Authority. Nothing in this Section shall be deemed
to require Lender to disclose any information which it is prohibited by law from
disclosing.
Section 6. No Warranty by Lender. Lender shall not be deemed to
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have made any covenant, warranty or representation with respect to the ability
of the Borrower to repay the Lender Loan or the truth, accuracy or completeness
of any report, statement or certificate now or hereafter given by the Borrower
in connection with the Lender Loan. Lender will exercise substantially the same
care in administering the Lender Loan as
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it exercises with respect to similar loans made or held by Lender.
Section 7. Changes to Lender Loan Documents. Lender shall not,
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without the prior written consent of the Authority, which consent shall be given
promptly, commensurate with the nature of the request, (i) enter into any
amendment, modification, supplement or replacement of any Lender Loan Document
which would materially and adversely affect the Authorities rights hereunder;
(ii) otherwise make or consent to any increase in the principal amount of the
Lender Loan, any change in interest rate on the Lender Loan not contemplated by
the Lender Loan Documents, any change in the maturity of the Lender Loan, or any
change in the principal amortization schedule for the Lender Loan, except as set
forth below; (iii) waive or release any claim against Borrower arising out of or
under any Lender Loan Document; or (iv) make or consent to releases of any
collateral securing the Lender Loan, unless (A) the sum of the fair market value
of such collateral, as reasonably determined by Lender, and the fair market
value, as reasonably determined by Lender, of all collateral previously released
does not exceed one percent (1%) of the original principal amount of the Lender
Loan, (B) the Borrower or any other entity pledges or grants to the Lender a
security interest and lien on substitute collateral of equal or greater fair
market value, as reasonably determined by Lender, than such released collateral,
or (C) the Lender receives payment
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on the Lender Loan in connection with such release of an amount equal to or
greater than the fair market value, as reasonably determined by Lender, of such
released collateral.
Notwithstanding the foregoing, Lender shall have the right, without the
consent of the Authority, to extend the maturity of the Lender Loan or modify
the principal amortization of the Lender Loan so that the outstanding principal
balance of the Lender Loan is reduced more slowly than the Scheduled
Amortization Loan Balance; provided, however, that in the event Lender so
extends the maturity or modifies the principal amortization without the consent
of the Authority, the Guarantee Amount shall continue to be reduced in
proportion to the reduction in the Scheduled Amortization Loan Balance in
accordance with the terms of Section 8 hereof as if no such modification shall
have occurred.
The Lender shall promptly furnish to the Authority copies of each and
every written amendment, waiver or consent entered into or given with respect to
any Lender Loan Document, whether or not the Authority's consent thereto is
required hereunder.
Section 8. Guarantee Amount. The Guarantee Amount at any given
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time shall be equal to (i) thirty percent (30%) of the lesser of (a) the then
outstanding principal balance of the Lender Loan or (b) the Scheduled
Amortization Loan Balance as of such date, minus (ii) the total of all payments
theretofore made by the Authority under this Guarantee. Upon any payment by the
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Authority under its Guarantee (other than payments pursuant to the Authority's
cure rights described in Section 9 which are not allocated to principal on the
Lender Loan), the Guarantee Amount shall be immediately and automatically
reduced by the amount of such payment, except that the Guarantee Amount may be
reinstated as provided in Section 9 hereof. Notwithstanding the foregoing, the
Guarantee Amount shall automatically reduce to zero and this Guarantee shall
terminate on a date two years from the date hereof, unless a demand on this
Guarantee is outstanding on such date; provided, however, that in the event that
an Authority Cure Period is in effect on such date, the Guarantee Amount shall
not reduce to zero and this Guarantee shall not terminate until forty-five (45)
days after the end of such Authority Cure Period.
Section 9. Procedures upon Default. In the event that there shall
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occur and continue any event of default as defined in the Lender Loan Documents
and such event of default shall have been declared by Lender (ar "Event of
Default"), Lender shall give written notice to the Authority of such Event of
Default prior to enforcing any of its rights or exercising any of its remedies
under the Lender Loan Documents with respect to such Event of Default,
including, without limitation, acceleration of the maturity of the indebtedness
evidenced thereby, and in any event no later than forty-five (45) days after the
Lender shall first have declared such Event of Default. After providing such
notice to the Authority, Lender shall, except as provided in the
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next sentence below, further forbear from enforcing any of its rights or
exercising any of its remedies under the Lender Loan Documents (other than the
exercise of any right of set-off or garnishment), including, without limitation,
acceleration of the maturity of the indebtedness evidenced thereby, for an
additional period of thirty (30) days (the "Authority Cure Period"), commencing
on the date the Authority receives such notice, unless the Authority, by written
notice to Lender, elects to terminate the Authority Cure Period on an earlier
date. Notwithstanding the foregoing, there shall be no Authority Cure Period and
Lender shall be entitled to enforce its rights and exercise its remedies under
the Lender Loan Documents at any time after notifying the Authority of an Event
of Default if (i) Lender reasonably believes that there has been fraud,
conversion or other irregularities committed by the Borrower with respect to the
Lender Loan, (ii) Lender reasonably anticipates that its loss on the Lender
Loan, after foreclosure of the collateral securing the Lender Loan and
enforcement by Lender of its other rights and remedies under the Lender Loan
Documents with respect thereto, but not taking into account any payment by the
Authority on its Guarantee, will exceed ten percent (10%) of the outstanding
principal balance of the Lender Loan at the time Lender provides notice to the
Authority of such Event of Default or (iii) any insolvency or bankruptcy
relating to the Borrower or all or substantially all of its assets shall have
been commenced (each of (i), (ii) and (iii) above a "Cure Termination Event");
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provided, however, that in any such event Lender shall give written notice
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thereof to the Authority at the time it notifies the Authority of such Event of
Default.
During the Authority Cure Period, the Authority shall have the right,
but not the obligation, to cure any Event of Default which results from the
Borrower's failure to pay principal of or interest on the Lender Loan or any
other amount due under the Lender Loan Documents by making payment of such
amount. The portion of any such payment by the Authority applicable to
principal of the Lender Loan shall be deemed made under this Guarantee, and
shall reduce the Guarantee Amount by the amount of such principal payment. If
the Authority elects to make a payment or payments curing an Event of Default
during the Authority Cure Period, the Authority may, but shall be under no
obligation to, continue such payments for a period of up to six (6) consecutive
months from the date the Authority first received notice of such Event of
Default, and the Authority Cure Period shall, for all purposes hereunder,
continue while such payments are being made; provided, however, that if at any
time during such six month period a Cure Termination Event occurs or is
discovered by Lender, Lender may provide written notice thereof to the Authority
and the Authority's Cure Period shall terminate upon receipt of such notice.
The Authority shall be entitled to recover from the Borrower all sums paid with
respect to the Lender Loan by the Authority pursuant to its right to cure, so
long as no other Event of Default has occurred and so long as a
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recovery would not result in another Event of Default, and further that such
right of recovery is subordinate to Lender's rights to payment in full of the
Lender Loan. In the event that the Authority recovers all such sums, plus
interest at the rate on the Lender Loan and all costs and expenses incurred in
connection therewith, then the Authority shall reinstate its Guarantee of the
Lender Loan to the amount that would otherwise have been in effect on the date
of such reinstatement if the Event of Default had not occurred.
In addition to the foregoing, the Authority shall have the right, but
not the obligation, at any time during the Authority Cure Period, to make
payment to Lender of all amounts outstanding under the Lender Loan Documents,
and thereupon the Authority shall be deemed to have purchased and shall succeed
to the rights and interests of Lender under the Lender Loan Documents. In the
event that the Authority so purchases the rights and interests of Lender under
the Lender Loan Documents, Lender shall execute and deliver such assignments and
other documents as the Authority shall reasonably request to reflect such
purchase by the Authority, such assignments to be without recourse,
representation or warranty to or by the Lender.
In the event that an Event of Default under such Lender Loan Documents
has occurred and the Authority Cure Period for such Event of Default is not
applicable, or has expired without such Event of Default being cured, then
Lender shall thereafter be free to enforce its rights and exercise its remedies
under the
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Lender Loan Documents without the consent of the Authority and shall be free to
make demand upon the Authority under its Guarantee, on the terms and subject to
the conditions set forth in Section 10 hereof.
Section 10. Payment of Estimated Loss. In the event that (i) an
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Event of Default has occurred, (ii) the Authority Cure Period for such Event of
Default has expired without cure of such Event of Default (or the Authority Cure
Period is not applicable) and (iii) either (A) Lender has accelerated the
maturity of the Lender Loan or (B) Lender cannot accelerate the maturity of the
Lender Loan because a proceeding under the Federal Bankruptcy laws is pending
with respect to the Borrower, then Lender shall be entitled to demand, and the
Authority shall be obligated to make, payment under the Guarantee, which payment
shall equal that portion of the Guarantee Amount or Estimated Loss as is
described below. Lender shall make such demand on the Authority by delivering
to the Authority a statement, which shall indicate Lender's estimated loss on
the Lender Loan based on a liquidation of the collateral securing the Lender
Loan and enforcement by Lender of its other rights and remedies under the Lender
Loan Documents (the "Estimated Loss"), shall contain such qualifications,
limitations, and assumptions as Lender shall reasonably deem necessary, and
shall include (i) the most recent appraisal in the Lender's possession of all
fixed asset collateral for the Lender Loan and (ii) a statement of the
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methodology used by Lender in determining the value of all other collateral.
Upon delivery of such a statement, Lender shall be entitled to receive under
this Guarantee eighty percent (80%) of the lesser of (i) the Estimated Loss and
(ii) the Guarantee Amount as of the date that Lender notified the Authority of
the Event of Default, less any unreimbursed payments on this Guarantee since
such date. The Authority will make payment to Lender of such amount within
thirty (30) days of delivery of such statement. Any payment by the Authority of
all or any portion of the Guarantee Amount shall permanently and irrevocably
reduce the Guarantee Amount by the amount of such payment in accordance with the
provisions of Section 8, but subject to reinstatement pursuant to Section 9.
Section 11. Lender Recovery and Payment of Final Loss. In the event
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that the Authority has made a payment to Lender pursuant to this Guarantee,
Lender shall pursue enforcement of such rights and remedies of Lender under the
Lender Loan Documents in accordance with prudent and customary bank practices,
including, without limitation, foreclosure against collateral securing the
Lender Loan, as and to the extent that the enforcement of such rights and
remedies would be prudent and commercially reasonable for Lender to pursue if it
were acting solely for its own account in order to realize the maximum recovery
on the Lender Loan. After Lender reasonably believes there is no reasonable
prospect for any further material
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recovery, Lender shall provide a written certification to the Authority stating
that there is no reasonable prospect for any further material recovery and
setting forth (i) the total principal, interest and Liquidation Costs then due
and owing under the Lender Loan Documents with respect to the Lender Loan (the
"Total Indebtedness"), and (ii) the aggregate amount recovered by the Lender
under the Lender Loan Documents which the Lender is entitled to retain (the
"Recoveries"). In the event that the sum of (i) the Recoveries and (ii) all
amounts previously paid by the Authority under this Guarantee exceed the Total
Indebtedness, then Lender shall promptly remit to the Authority the amount of
such excess, provided that the Authority shall not be entitled to receive from
Recoveries amounts in excess of all amounts paid by the Authority under this
Guarantee. In the event that the sum of (i) the Recoveries and (ii) all amounts
previously paid by the Authority under this Guarantee is less than the Total
Indebtedness, then the Authority shall promptly remit to Lender the lesser of
(x) such difference and (y) the Guarantee Amount as of the date Lender notified
the Authority of the Event of Default pursuant to Section 9 hereof, less all
unrecovered payments made by the Authority on this Guarantee since such date. If
at any time after such settlement, Lender realizes additional Recoveries such
that the sum of (i) all Recoveries realized by the Lender and (ii) all amounts
paid by the Authority under this Guarantee exceeds the Total Indebtedness,
Lender shall notify the Authority of such excess
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and shall promptly remit to the Authority the same, provided that the Authority
shall not be entitled to receive from Recoveries amounts in excess of all
amounts paid by the Authority under this Guarantee. Similarly, if at any time
Lender receives any Recoveries which Recoveries or any part thereof are
subsequently invalidated, declared to be fraudulent or preferentially set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy laws, state or federal law, common law or equitable doctrine, to the
extent that the sum of (i) all Recoveries actually retained by the Lender and
(ii) all amounts paid by the Authority under this Guarantee is less than the
Total Indebtedness, Lender shall so notify the Authority and the Authority shall
promptly remit to Lender the lesser of (x) such difference and (y) the Guarantee
Amount as of the date Lender notified the Authority of the Event of Default
pursuant to Section 9 hereof, less all unreimbursed payments made by the
Authority on this Guarantee since such date.
Section 12. Sale of Lender Loan; Assignment of Rights. Lender shall
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be permitted at any time to sell participations or other interests in the Lender
Loan without cancelling, modifying or affecting in any way this Guarantee, so
long as Lender continues to service the Lender Loan and otherwise performs all
of its obligations to the Authority hereunder. In the event that Lender
transfers all or part of the Lender Loan and does not continue to service the
Lender Loan, then this Guarantee of such
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Lender Loan shall automatically terminate and be of no force and effect, unless
the Authority has otherwise consented in writing, which consent shall not be
unreasonably withheld. For purposes of this Section, the term "transfer" shall
include, without limitation, any assignment, assumption, sale, participation or
other conveyance of the Lender Loan, including as part of a transfer of Lender's
loan portfolio; any merger or consolidation of Lender with another entity that
is not currently an affiliate of the Lender, unless Lender is the surviving
entity; and the administration of Lender by the Federal Deposit Insurance
Corporation or the Resolution Trust Corporation or any equivalent agency,
department or successor thereto, as receiver or otherwise.
Section 13. No Benefit to Borrower. In no event shall any provision
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of this Guarantee be deemed to give any rights to the Borrower, this Guarantee
being solely for the purpose of defining the respective rights of Lender and the
Authority. No payment by the Authority on this Guarantee shall be deemed to
discharge or release the Borrower from any of its obligations under the Lender
Loan Documents.
Section 14. Fees and Expenses of Authority. Lender shall pay or
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cause the Borrower to pay an annual guarantee fee to the Authority on the date
of closing of the Lender Loan and on each anniversary of such date, which
guarantee fee shall be equal to
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the product of (i) the Scheduled Amortization Loan Balance on such date
multiplied by (ii) the applicable percentage for such date determined as
hereafter set forth (the "Fee Percentage"). The Fee Percentage on the closing
date shall be one-half of one percent (.5%). The Fee Percentage shall increase
each year by 37.5 basis points, up to a maximum of one and one-quarter percent
(1.25%). Such fees shall be in addition to any application or commitment fees.
If such annual guarantee fee is not paid within fifteen (15) days of the
date due, then the Authority shall be entitled to deliver to Tender a notice
providing that this Guarantee may be terminated if such annual guarantee fee is
not paid according to the provisions hereunder. Upon receipt of such notice,
Lender will have a period of thirty (30) days either to cause payment of the
guarantee fee by the Borrower or make such payment to the Authority itself.
Such payment by Lender will be deemed an event of default under the Lender Loan
Documents. In the event that such fee is not paid within such thirty (30) day
period, the Authority may terminate this Guarantee by providing written notice
of such termination to Lender, whereupon the Authority's obligations under this
Guarantee shall immediately be deemed terminated and of no further force or
effect. The Authority may not terminate this Guarantee for nonpayment of the
guarantee fee after demand has been made on this Guarantee.
The Borrower shall be liable to the Authority for all of the Authority's
costs and expenses relating to the Lender Loan,
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including, without limitation, reasonable attorneys' fees and expenses. It shall
be a condition to issuance of this Guarantee that all such costs and expenses of
the Authority incurred prior thereto shall have been paid in full by the
Borrower.
Section 15. Termination of Guarantee. If Lender shall be in default
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under the terms of this Guarantee with respect to the Lender Loan, the Authority
may notify Lender of such default in writing and Lender shall have sixty (60)
days from the date of receipt of such written notice to cure such default;
provided, however, that if such default cannot be reasonably cured in such sixty
(60) day period, Lender shall have an additional period of sixty (60) days to
cure such default so long as Lender is making a diligent attempt to cure during
the initial sixty (60) day period. The Authority shall not be required to make
any payments on this Guarantee during such 60 day periods if a default by Lender
hereunder has occurred and is continuing. If Lender does not cure such default
within the cure period set forth above, the Authority may terminate this
Guarantee by providing written notice to Lender to such effect. Notwithstanding
the foregoing, the Authority shall not be entitled to terminate this Guarantee
after the issuance thereof for any default of Lender which occurs prior to the
issuance of the Guarantee, except in the event of fraud by Lender, or as
provided in Section 3 hereof.
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The rights of the Authority under this Section shall be in addition to
and not in lieu of any other rights or remedies the Authority may have upon
breach of this Agreement by Lender.
Section 16. Adequacy of Bank Capitalization. In the event that
-------------------------------
Lender's tier 1 capital to assets ratio shall at any time fall below three
percent (3%) Lender shall promptly notify the Authority. In such event, the
Authority may direct Lender to use its best efforts to transfer the Lender Loan
to another lender who is participating in the Guarantee program or is otherwise
acceptable to the Authority. The Authority may terminate this Guarantee if it
has not been so transferred within ninety (90) days of such direction by
providing written notice thereof to Lender; provided, however that if, prior to
the termination of this Guarantee, Lender's tier 1 capital to assets ratio is
once again above three percent (3%), then the Authority shall no longer be
entitled to direct Lender to transfer the Lender Loan or to terminate this
Guarantee. Lender and the Authority acknowledge that federal bank regulatory
agencies may formulate a new classification system for the capitalization of
banks which are subject to the authority of such agencIes. Upon implementation
of such classification system, Lender and the Authority will revise this Section
to employ such classification system in evaluating the adequacy of Lender's
capitalization.
Section 17. Miscellaneous.
--------------
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17.1 This Guarantee may only be amended by an instrument in
writing executed by Lender and the Authority.
17.2 All of the provisions hereof shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, provided that any assignment by(Lender of its rights, duties or
obligations hereunder shall be subject to terms of Section 12 hereof.
17.3 All notices and other communications provided hereunder
shall be in writing and mailed by registered or certified mail (return receipt
requested), postage paid, or delivered by hand or by overnight courier or by
telecopier or telex (with prompt confirmation by telephone), addressed to the
respective parties hereto at their respective addresses set forth in the first
paragraph hereof, or to such other address as shall have been furnished in
writing to the party initiating the notice or communication. Any notice or
communication so addressed and mailed or delivered shall be deemed given when
actually received by addressee.
17.4 This Guarantee shall be governed by and construed in
accordance with the laws of the State.
17.5 The section headings hereof appear only as a matter of
convenience and shall not affect the construction of this Guarantee.
Section 18. Requirements of the Act. Pursuant to the terms of the
-----------------------
Act, the obligations of the Authority under this Guarantee
-25-
shall first be paid from any amounts readily available in the Connecticut Works
Guarantee Fund (as defined in the Act) before any amounts available from the
bond authorization contained in Section 32-262 of the Connecticut General
Statutes are utilized. In accordance with and subject to the Act, the faith and
credit of the State of Connecticut is pledged, pursuant to such bond
authorization and in accordance with Section 3-20 of the Connecticut General
Statutes, to provide to the Connecticut Works Guarantee Fund moneys as and when
necessary to make timely payments of all amounts required to be paid under the
terms of this Guarantee, but not in excess of the amount of bonds so authorized
by the State of Connecticut Bond Commission for such purpose less the amounts
paid by the State of Connecticut for deposit to the Connecticut Works Guarantee
Fund. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE OBLIGATION OF THE
AUTHORITY TO MANE PAYMENTS UNDER THIS GUARANTEE SHALL BE LIMITED SOLELY TO SUCH
SOURCES AND SHALL NOT CONSTITUTE A DEBT OR LIABILITY OF THE AUTHORITY OR THE
STATE OF CONNECTICUT.
The Lender and the Borrower each acknowledges that this Guarantee
Certificate has been issued subject to the terms of Section 32-5a of the
Connecticut General Statutes, as amended by Public Act 93-218 and Public Act
93-360. Section 32-5a:
(i) provides that a business organization receiving
financial assistance from the Authority shall not relocate
outside of the State of Connecticut for (A) ten (10) years after
receiving such assistance from the Authority or (B) during the
term that any loan or loan guarantee constituting such financial
assistance is outstanding, whichever is longer (such period
-26-
being hereafter referred to as the "Benefit Period"), unless the
full amount of the assistance is repaid to the Authority and a
penalty equal to five percent (5%) of the total assistance
received is paid to the Authority; and
(ii) provides that if such business organization relocates
within the State of Connecticut during the Benefit Period, such
business organization shall offer employment at the new location
to its employees from the original location if such employment
is available.
Notwithstanding anything herein to the contrary, if at any time within
the Benefit Period the Borrower relocates (as such term is defined in Section
32-5a of the Connecticut General Statutes, and regulations related thereto, as
the same may be amended from time to time) outside of the State of Connecticut
(an "Out-of-State Relocation") or relocates within the State of Connecticut and
does not offer employment as provided above, then:
(1) such action shall constitute an immediate event of
default under the Lender Loan Documents and the Authority, at
its option, may terminate this Guarantee (if the same is still
in effect) by giving written notice thereof to the Lender
following such Out-of-State Relocation or failure to provide
employment, which termination shall be effective ninety (90)
days after the date of such notice unless the Lender makes
demand under this Guarantee prior to such date. In the event
that the Lender makes demand under this Guarantee as a result of
such notice and prior to the effective date of such termination,
this Guarantee shall remain in effect with respect to the
Authority's and the Lender's rights and obligations following a
demand hereon as provided in this Guarantee, except that the
Authority shall be deemed to have waived the Authority Cure
Period; and
(2) with respect to an Out-of-State Relocation, the Borrower
shall immediately upon demand pay to the Authority an amount
equal to the full amount paid by the Authority at any time on
account of
-27-
this Guarantee, if any, and a penalty equal to five percent (5%)
of the Guarantee Amount at the time this Guarantee was initially
issued, such penalty to be due and payable whether or not the
Authority has made any payment on account of this Guarantee;
provided that the Authority's right to receive payment of the
full amount paid on account of this Guarantee (but not its right
to receive payment of such penalty) shall be subordinate in
right of payment to repayment of the Lender Loan in accordance
with the terms of this Guarantee.
If the Borrower decides to relocate within or outside of the State of
Connecticut at any time within the Benefit Period, the Borrower agrees to
provide the Authority and the Lender with immediate written notice when such
decision is made, together with such other information concerning such
relocation as the Authority or the Lender may request.
The Borrower's obligations pursuant to this Section 18 shall survive the
repayment of the Lender Loan and the termination of this Guarantee.
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IN WITNESS WHEREOF, the parties, by their duly authorized officers,
have executed this Guarantee as of the date first above written.
CONNECTICUT DEVELOPMENT AUTHORITY
By /s/ X. Xxxxxx
------------------------------------
THE BANK OF NEW YORK
By /s/ Xxxxx Xxxxx, VP
------------------------------------
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The undersigned acknowledges and agrees to the terms of this Guarantee
Agreement, including without limitation those provisions specifically binding
upon the undersigned. The undersigned acknowledges and agrees that any payment
by the Authority hereunder shall not be deemed to be a payment on the Lender
Loan, but rather shall constitute a purchase by the Authority of an interest in
the Lender Loan, and such payment shall not in any way discharge or release the
undersigned from any of its obligations on the Lender Loan. The undersigned
acknowledges and agrees that the Authority shall be entitled to receive and
review any and all financial information and other documentation relating to the
undersigned in possession of the Lender. The undersigned authorizes Lender to
make all such information available to the Authority, and waives any right it
may have to restrict or prohibit such disclosure.
TSI INTERNATIONAL SOFTWARE, LTD.
By /s/ Xxxxxxx Xxxxxxxx
-----------------------------
-30-
AMENDMENT NO. 1 TO
GUARANTEE AGREEMENT
-------------------
This AMENDMENT NO. 1 (this "Amendment") to the Guarantee Agreement (the
"Guarantee Agreement") dated as of August 22, 1994 between the CONNECTICUT
DEVELOPMENT AUTHORITY (the "Authority") and THE BANK OF NEW YORK (the "Bank"),
is made and entered into as of the 21st day of August, 1996.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Authority and the Bank wish to amend certain provisions of
the Credit Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Authority and the Bank agree
as follows:
1. The last sentence in Section 8 of the Guarantee Agreement is
hereby deleted in its entirety and replaced with the following:
Notwithstanding the foregoing, the Guarantee Amount shall
automatically reduce to zero and this Guarantee shall terminate on the
date two years and ninety days from the date hereof, unless a demand on
this Guarantee is outstanding on such date; provided, however, that in
the event that an Authority Cure Period is in effect on such date, the
Guarantee Amount shall not reduce to zero and this Guarantee shall not
terminate until forty-five (45) days after the end of such Authority
Cure Period.
2. All references in the Guarantee Agreement to "this Agreement,"
"herein," "hereof" and "hereunder" shall mean the Guarantee Agreement as amended
by this Amendment.
3. This Amendment shall be construed in accordance with and
governed by the laws of the State of Connecticut (without giving effect to its
choice of law principles).
4. This Amendment may be executed in one or more counterparts, each
of which shall be deemed an original instrument, and all such counterparts
together shall constitute but one agreement.
-1-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers as of the date first above written.
CONNECTICUT DEVELOPMENT AUTHORITY
By: /s/Xxxxxxx Xxxxx
---------------------------
Name:
Title:
THE BANK OF NEW YORK
By: /s/Xxxxx Xxxxx
---------------------------
Name:
Title:
Acknowledged and consented to as
of the 21st day of August, 1996:
TSI INTERNATIONAL SOFTWARE, LTD.
By: /s/Xxx Xxxxxx
--------------------------
Name:
Title:
-2-
AMENDMENT NO. 2 TO
GUARANTEE AGREEMENT
-------------------
This AMENDMENT NO. 2 (this "Amendment") to the Guarantee Agreement (the
"Guarantee Agreement") dated as of August 22, 1994 between the CONNECTICUT
DEVELOPMENT AUTHORITY (the "Authority") and THE BANK OF NEW YORK (the "Bank"),
as amended by Amendment No. 1 thereto dated as of August 21, 1996 (as so
amended, the "Guarantee Agreement"), is made and entered into as of the 18th day
of November, 1996.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Authority and the Bank wish to amend certain provisions of
the Guarantee Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Authority and the Bank agree
as follows:
1. The following definitions in Section 1 of the Guarantee
Agreement are hereby deleted in their entirety and replaced with the following:
"Guarantee" shall mean this agreement of the Authority to
guarantee a portion of the Lender Loan under the Guarantee Program, as
amended, supplemented or modified from time to time.
"Fee Percentage" shall mean one and one-quarter percent (1.25%)
per annum.
2. The second paragraph of Section 7 of the Guarantee is hereby
amended by deleting the words "reduced in proportion to the reduction in" and
inserting in lieu thereof "determined in part based on".
3. Section 8 of the Guarantee is hereby deleted in its entirety and
replaced with the following:
Section 8. Guarantee Amount. The Guarantee Amount at any given
----------------
time shall be equal to (i) the lesser of (a) thirty percent (30%) of the
then outstanding principal balance of the Lender Loan, (b) thirty
percent (30%) of the Scheduled Amortization Loan Balance as of such date
and (c) $600,000, minus (ii) the total of all payments theretofore made
by the Authority under this Guarantee. Upon any payment by the
-1-
Authority under this Guarantee (other than payments pursuant to the
Authority's cure rights described in Section 9 which are not allocated
to principal on the Lender Loan), the Guarantee Amount shall be
immediately and automatically reduced by the amount of such payment,
except that the Guarantee Amount may be reinstated as provided in
Section 9 hereof. Notwithstanding the foregoing, the Guarantee Amount
shall automatically reduce to zero and this Guarantee shall terminate on
November 18, 1998, unless a demand on this Guarantee is outstanding on
such date; provided, however, that in the event that an Authority Cure
Period is in effect on such date, the Guarantee Amount shall not reduce
to zero and this Guarantee shall not terminate until forty-five (45)
days after the end of such Authority Cure Period.
4. The first paragraph of Section 14 of the Guarantee is hereby
deleted in its entirety and replaced with the following:
Lender shall pay or cause the Borrower to pay an annual
guarantee fee to the Authority on the date of closing of the Lender Loan
and on each anniversary of such date, which guarantee fee shall be equal
to the product of (i) the lesser of (a) the Scheduled Amortization Loan
Balance on such date and (b) Two Million Dollars ($2,000,000), and (ii)
the Fee Percentage.
5. All references in the Guarantee Agreement to "this Agreement,"
"herein," "hereof" and "hereunder" shall mean the Guarantee Agreement as amended
by this Amendment.
6. This Amendment shall be construed in accordance with and
governed by the laws of the State of Connecticut (without giving effect to its
choice of law principles).
7. This Amendment may be executed in one or more counterparts, each
of which shall be deemed an original instrument, and all such counterparts
together shall constitute but one agreement.
-2-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers as of the date first above written.
CONNECTICUT DEVELOPMENT AUTHORITY
By: /s/ Xxxxx X. Xxxx
----------------------------
Xxxxx X. Xxxx
Its Loan Closing Administrator
THE BANK OF NEW YORK
By: /s/ Xxxxx Xxxxx
---------------------------
Name:
Title:
Acknowledged and consented to as
of the 18th day of November, 1996:
----
TSI INTERNATIONAL SOFTWARE, LTD.
By: /s/ Xxx Xxxxxx
----------------------------
Name:
Title:
-3-
