EXHIBIT 10.4
EXHIBIT D
SUBSIDIARY GUARANTY
GUARANTY, dated as of February 23, 1999 (as amended, supplemented,
restated or otherwise modified from time to time, this "GUARANTY"), made by
each of the Persons (such capitalized term, and all other capitalized terms
used in these recitals without definition, to have the meanings assigned to
such terms in Article I) identified on the signature page hereof (herein
individually referred to as a "GUARANTOR" and collective as the
"GUARANTORS"), in favor of each of the Purchasers (as defined below).
W I T N E S S E T H:
WHEREAS, USN Communications, Inc., a Delaware corporation (the
"COMPANY"), has entered into the Note Purchase Agreement, dated as of the
date hereof (as it may be amended, restated or otherwise modified from time
to time, the "NOTE PURCHASE AGREEMENT"), with the purchasers listed on
Annex I thereto (collectively, together with their respective successors,
transferees and assigns, the "PURCHASERS");
WHEREAS, each Guarantor is a Subsidiary of the Company;
WHEREAS, as a condition precedent to the purchase of the Notes
under the Note Purchase Agreement, each Guarantor is required to execute
and deliver this Guaranty; and
WHEREAS, each Guarantor has duly authorized the execution,
delivery and performance of this Guaranty and will receive direct and
indirect benefits by reason of the sale of the Notes by the Company to the
Purchasers;
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, and in order to induce the
Purchasers to purchase the Notes pursuant to the Note Purchase Agreement,
each Guarantor hereby agrees with the Purchasers as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. CERTAIN TERMS. The following terms when used in this
Guaranty, including its preamble and recitals, shall have the following
meanings (such definitions to be equally applicable to the singular and
plural forms thereof):
"COMPANY" is defined in the first recital.
"GUARANTEED OBLIGATIONS" is defined in Section 2.1.
"GUARANTOR" and "GUARANTORS" is defined in the preamble.
"GUARANTY" is defined in the preamble.
"NOTE PURCHASE AGREEMENT" is defined in the first recital.
"PURCHASERS" is defined in the first recital.
SECTION 1.2. NOTE PURCHASE AGREEMENT DEFINITIONS. Unless otherwise
defined herein or the context otherwise requires, terms used in this
Guaranty, including its preamble and recitals, have the meanings provided
in the Note Purchase Agreement.
ARTICLE 2
GUARANTY
SECTION 2.1. GUARANTY. Each Guarantor hereby jointly and severally
unconditionally and irrevocably guarantees the full and prompt payment when
due, whether at stated maturity, by acceleration or otherwise (including,
without limitation, all amounts which would have become due but for the
operation of the automatic stay under Section 362(a) of the Federal
Bankruptcy Code, 11 U.S.C. 362(a)), of the following (collectively, the
"GUARANTEED OBLIGATIONS"),
(a) all Obligations of the Company to each Purchaser now
or hereafter existing under the Note Purchase Agreement and each
other Note Document (including this Guaranty), whether for
principal, interest, fees, expenses or otherwise; and
(b) any and all costs and expenses (including reasonable
fees and expenses of legal counsel) incurred by each Purchaser in
enforcing any of its rights under this Guaranty.
This Guaranty constitutes a guaranty of payment when due and not
merely of collection, and each Guarantor specifically agrees that it shall
not be necessary or required that any Purchaser exercise any right, assert
any claim or demand or enforce any remedy whatsoever against the Company,
any other Guarantor or any Collateral before or as a condition to the
obligations of such Guarantor hereunder.
SECTION 2.2. GUARANTY ABSOLUTE. This Guaranty is a continuing,
absolute, unconditional and irrevocable guarantee of payment and shall
remain in full force and effect until all the Guaranteed Obligations have
been indefeasibly paid in full in cash. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms
of the agreement under which they arise, regardless of any law, regulation
or order now or hereafter in effect in any jurisdiction affecting any of
such terms or the rights of any Purchaser with respect thereto. The
liability of each Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
(a) any lack of validity, legality or enforceability of
the Note Purchase Agreement, the Notes, any other Note Document or
any other agreement or instrument relating to any thereof;
(b) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Guaranteed
Obligations, or any compromise, renewal, extension, acceleration
or release with respect thereto, or any other amendment or waiver
of or any consent to departure from the Note Purchase Agreement,
the Notes or any other Note Document;
(c) any addition, exchange, release, impairment or
non-perfection of any collateral, or any release or amendment or
waiver of or consent to departure from any other guaranty, for all
or any of the Guaranteed Obligations;
(d) the failure of any Purchaser
(i) to assert any claim or demand or to enforce
any right or remedy against the Company, any Guarantor or
any other Person (including any other guarantor) under
the provisions of the Note Purchase Agreement, any Note,
any other Note Document or otherwise, or
(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any of the
Guaranteed Obligations;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the
terms of the Note Purchase Agreement, any Note or any other Note
Document;
(f) any defense, set-off or counterclaim which may at any
time be available to or be asserted by the Company or any
Guarantor against any Purchaser;
(g) any reduction, limitation, impairment or termination
of the Guaranteed Obligations for any reason, including any claim
of waiver, release, surrender, alteration or compromise, and shall
not be subject to (and each Guarantor hereby waives any right to
or claim of) any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, the Guaranteed
Obligations or otherwise; or
(h) any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable
discharge of, the Company or any Guarantor.
SECTION 2.3. REINSTATEMENT, ETC. Each Guarantor agrees that this
Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment (in whole or in part) of any of the
Guaranteed Obligations is rescinded or must otherwise be restored by any
Purchaser, upon the insolvency, bankruptcy or reorganization of the
Company, any other Guarantor or otherwise, all as though such payment had
not been made.
SECTION 2.4. WAIVER. Each Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of
the Guaranteed Obligations and this Guaranty and any requirement that any
Purchaser protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against the
Company, any other Guarantor or any other Person (including any other
guarantor) or any collateral securing the Guaranteed Obligations.
SECTION 2.5. WAIVER OF SUBROGATION. Each Guarantor hereby
irrevocably waives any claim or other rights which it may now or hereafter
acquire against the Company or any other Guarantor that arise from the
existence, payment, performance or enforcement of such Guarantor's
obligations under this Guaranty or any other Note Document, including any
right of subrogation, reimbursement, exoneration or indemnification, any
right to participate in any claim or remedy of any Purchaser against the
Company or any other Guarantor or any collateral which any Purchaser now
has or hereafter acquires, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, including the
right to take or receive from the Company or any other Guarantor, directly
or indirectly, in cash or other property or by set-off or in any manner,
payment or security on account of such claim or other rights, until such
time as the Guaranteed Obligations shall have been indefeasibly paid in
full in cash. If any amount shall be paid to any Guarantor in violation of
the preceding sentence, such amount shall be deemed to have been paid to
such Guarantor for the benefit of, and held in trust for, the Purchasers,
and shall forthwith be paid to the Purchasers to be credited and applied
against the Guaranteed Obligations, whether matured or unmatured. Each
Guarantor acknowledges that it will receive direct and indirect benefits
from the financing arrangements contemplated by the Note Purchase Agreement
and that the waiver set forth in this Section is knowingly made in
contemplation of such benefits.
SECTION 2.6. SUCCESSORS, TRANSFEREES AND ASSIGNS; TRANSFERS OF
NOTES, ETC. This Guaranty shall:
(a) be binding upon each Guarantor and its successors,
transferees and assigns; and
(b) inure to the benefit of and be enforceable by the
Purchasers.
Without limiting the generality of clause (b), any Purchaser may assign or
otherwise transfer (in whole or in part) any Note held by it to any other
Person, and such other Person shall thereupon become vested with all rights
and benefits in respect thereof granted to such Purchaser under any Note
Document (including this Guaranty) or otherwise.
ARTICLE 3
REPRESENTATIONS AND COVENANTS
SECTION 3.1. REPRESENTATIONS AND WARRANTIES. Each Guarantor
hereby represents and warrants to the Purchasers as follows:
(a) such Guarantor is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has full corporate power and
authority to enter into this Guaranty and the other Note Documents
to which it is a party and to carry out the transactions
contemplated hereby and thereby;
(b) the execution and delivery by such Guarantor of this
Guaranty and the other Note Documents to which it is a party and
the consummation by such Guarantor of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate action of such Guarantor. This Guaranty and
such other Note Documents to which such Guarantor is a party have
each been duly executed and delivered by such Guarantor and each
constitutes the legal, valid and binding obligation of such
Guarantor enforceable against such Guarantor in accordance with
its terms, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium or similar laws at the time in effect
affecting the rights of creditors generally and subject to the
effects of general principles of equity (regardless of whether
considered in a proceeding in law or equity); and
(c) the execution and delivery of this Guaranty and the
other Note Documents to which such Guarantor is a party and the
consummation by such Guarantor of the transactions contemplated
hereby do not (i) contravene or result in a default under such
Guarantor's articles of incorporation or bylaws (or comparable
organizational documents), (ii) contravene or result in a default
under any contractual restriction, law or governmental regulation
or court decree or order binding on such Guarantor, (iii) require
any filings, consents or authorizations which have not been duly
obtained or (iv) result in the creation or imposition of any Lien
on such Guarantor's properties (other than in favor of the
Purchasers).
SECTION 3.2. COVENANTS. Each Guarantor agrees to comply with all
the covenants contained in the Note Purchase Agreement and the other Note
Documents that are applicable to it.
ARTICLE 4
MISCELLANEOUS
SECTION 4.1. NOTE DOCUMENT. This Guaranty is a Note Document
executed pursuant to the Note Purchase Agreement and shall (unless
otherwise expressly indicated herein) be construed, administered and
applied in accordance with the terms and provisions thereof.
SECTION 4.2. BINDING ON SUCCESSORS, TRANSFEREES AND ASSIGNS;
ASSIGNMENT. In addition to, and not in limitation of, Section 2.6, this
Guaranty shall be binding upon each Guarantor and its successors,
transferees and assigns and shall inure to the benefit of and be
enforceable by the Purchasers and their respective successors, transferees
and assigns; provided, however, that no Guarantor may assign any of its
obligations hereunder without the prior written consent of each Purchaser.
SECTION 4.3. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Guaranty nor consent to any departure by any Guarantor
therefrom shall in any event be effective unless the same shall be in
writing and signed by each Purchaser and, if required, approved by the
Bankruptcy Court and, in the case of any such amendment, each Guarantor,
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 4.4. ADDRESSES FOR NOTICES. All notices and other
communications provided for hereunder shall be in writing or by facsimile
transmission and, if to any Guarantor, mailed, given by facsimile
transmission or delivered to it care of the Company at the address provided
for in the Note Purchase Agreement and as otherwise provided in the Interim
DIP Order, and if to the Purchasers, mailed, given by facsimile
transmission or delivered to it, at the address provided for in the Note
Purchase Agreement, or as to any such party at such other address as shall
be designated by such party in a written notice to each other party
complying as to delivery with the terms of this Section. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given
three Business Days after posting; any notice sent by prepaid overnight
express mail shall be deemed delivered on the next following Business Day;
and any notice, if transmitted by facsimile transmission or delivery, shall
be deemed given upon electronic confirmation of transmission by the sender
thereof.
SECTION 4.5. NO WAIVER; REMEDIES. No failure on the part of any
Purchaser to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise
of any right hereunder preclude any other or further exercise thereof or
the exercise of any other right. Each Purchaser shall have all remedies
available at law or equity, including without limitation, the remedy of
specific performance for any breach of any provision hereof. The remedies
herein provided are cumulative and not exclusive of any remedies provided
by law or equity.
SECTION 4.6. RIGHT TO SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, each Purchaser is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to
setoff and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time
owing by such Purchaser to or for the credit or the account of any
Guarantor against any and all of the Guaranteed Obligations of such
Guarantor now or hereafter existing under this Guaranty, irrespective of
whether such Purchaser shall have made any demand under this Guaranty. Each
Purchaser agrees promptly to notify the Company after any such set-off and
application made by such Purchaser, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The
rights of each Purchaser under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which
the Purchasers may have.
SECTION 4.7. SEVERABILITY. Any provision of this Guaranty 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 of this
Guaranty or affecting the validity or enforceability of such provisions in
any other jurisdiction.
SECTION 4.8. COUNTERPARTS. This Guaranty may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute but one and the same
agreement.
SECTION 4.9. GOVERNING LAW; ENTIRE AGREEMENT. THIS GUARANTY SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK. EACH GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER NOTE DOCUMENT TO WHICH IT IS A PARTY) AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PURCHASERS ENTERING
INTO THE NOTE PURCHASE AGREEMENT AND EACH SUCH OTHER NOTE DOCUMENT.
SECTION 4.10. WAIVER OF JURY TRIAL. EACH GUARANTOR AND PURCHASER
HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS GUARANTY OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR
ACTIONS OF THE PURCHASERS OR ANY GUARANTOR. THIS GUARANTY AND THE OTHER
NOTE DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO
WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 4.11. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS GUARANTY OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PURCHASER OR ANY GUARANTOR
SHALL BE BROUGHT AND MAINTAINED IN THE FEDERAL AND STATE COURTS OF THE
STATE OF NEW YORK LOCATED IN NEW YORK, NEW YORK. EACH GUARANTOR HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH
COURTS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. EACH GUARANTOR FURTHER IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH GUARANTOR
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE
AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. TO THE EXTENT THAT ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID
OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH
GUARANTOR HEREBY, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
GUARANTY.
SECTION 4.12. WAIVER OF CERTAIN CLAIMS. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NO GUARANTOR SHALL ASSERT, AND HEREBY WAIVES, ANY CLAIM
AGAINST EACH PURCHASER ON ANY THEORY OF LIABILITY FOR SPECIAL, INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES)
ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS GUARANTY OR ANY
INSTRUMENT CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
USN COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
USN Communications, Inc.
00 Xxxxx Xxxxxxxxx Xxxxx - Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Phone: 312/000-0000
Fax: 312/000-0000
U.S. NETWORK CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
FONENET/OHIO, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
USN COMMUNICATIONS MIDWEST, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
USN COMMUNICATIONS NORTHEAST, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
QUEST UNITED, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
USN COMMUNICATIONS LONG DISTANCE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
USN SOLUTIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
USN COMMUNICATIONS ATLANTIC, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
USN COMMUNICATIONS VIRGINIA, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
USN COMMUNICATIONS SOUTHWEST, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
USN COMMUNICATIONS MAINE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
USN WIRELESS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
CONNECTICUT TELEPHONE & COMMUNICATION
SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
CONNECTICUT MOBILECOM, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
USN WIRELESS OF RHODE ISLAND, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
USN WIRELESS OF MASSACHUSETTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
USN COMMUNICATIONS WEST, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title:
Acknowledged and Accepted:
XXXXXXX XXXXX GLOBAL ALLOCATION FUND, INC.
By: /s/ Xxxx Xxx X'Xxxxxxx
_______________________________
Name: Xxxx Xxx X'Xxxxxxx
Title: V.P. MLAM, Authorized
Signatory
CORCOMM LIMITED
By: /s/ Xxxxxxx X. Xxxxxxx
_______________________________
Name: Xxxxxxx X. Xxxxxxx
Title:
