GUARANTY AGREEMENT
This Guaranty Agreement ("Guaranty") is entered into as of
November 5, 1998, by the Persons named on the signature pages
hereto (each, a "Guarantor"), in favor of Credit Suisse First
Boston, as Agent for the Lenders under the Credit Agreement
(defined below) (solely in its capacity as Agent, "Agent").
Recitals
A. Pursuant to that certain Credit Agreement dated as of
June 10, 1998 (as amended by that Amendment No. 1 to Credit
Agreement dated as of the date hereof, and as further amended,
modified, supplemented or restated from time to time, the "Credit
Agreement"), by and among Micron Electronics, Inc., a Minnesota
corporation, as the borrower ("Borrower"), the financial
institutions from time to time party thereto and named as Lenders
therein ("Lenders"), and Agent, Lenders have agreed to make
certain advances of money and to extend certain financial
accommodations to Borrower in the amounts and manner set forth in
the Credit Agreement (collectively, the "Loans").
B. In consideration of the agreement of Agent and Lenders
to enter into an amendment to the Credit Agreement and to
continue to make the Loans thereunder available to Borrower,
Guarantor has agreed to execute and deliver this Guaranty in
favor of Agent, on behalf of Lenders.
C. Agent and Lenders are relying upon the execution and
delivery by Guarantor of this Guaranty.
Agreement
Now, Therefore, in consideration of the foregoing recitals
and in order to induce Agent and Lenders to execute the Credit
Agreement and the other Loan Documents, and for other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, Guarantor
hereby represents, warrants, covenants and agrees as follows:
1. Definitions.
All capitalized terms used herein without definition shall
have the meanings ascribed to them in the Credit Agreement.
2. Guaranty.
2.1 Unconditional Guaranty.
Guarantor hereby unconditionally, absolutely and
irrevocably guarantees to Agent and Lenders the full, prompt and
complete payment and performance when due (whether by stated
maturity, by acceleration or otherwise) of all indebtedness of
Borrower to Agent and Lenders (whether created under the Credit
Agreement and the other Loan Documents or otherwise) (all such
indebtedness being the "Liabilities"), together with, without
limitation, the prompt payment of all expenses, including,
without limitation, reasonable attorneys' fees and legal
expenses, incidental to the collection of the Liabilities and the
enforcement or protection of any security interests in and to any
collateral therefor. The term "indebtedness" is used herein in
its most comprehensive sense and includes any and all advances,
debts, obligations and Liabilities heretofore, now or hereafter
made, incurred or created, whether voluntary or involuntary and
whether due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, and whether recovery
upon such indebtedness may be or hereafter becomes unenforceable.
(The Liabilities and all other obligations and covenants to be
performed by Guarantor under this Guaranty shall hereinafter from
time to time be collectively referred to as the "Guaranty
Obligations".)
2.2 Joint and Several Liability. If any other Person in
addition to Guarantor shall guarantee the Liabilities, all such
guarantors and their respective successors and assigns shall be
jointly and severally liable therefor, notwithstanding any
relationship or contract of co-obligation by or among such
guarantors. Agent's enforcement of the Liabilities is not
conditioned upon Agent's obtaining from any other Person a
guaranty of all or any part of the Liabilities.
2.3 Separate Obligations. The Guaranty Obligations of
Guarantor arising hereunder are independent of and separate from
any and all obligations of Guarantor to Agent arising under the
Credit Agreement or any other Loan Document as may have been
executed by Guarantor and delivered to Agent in connection therewith.
3. Payments.
All payments to be made by Guarantor to Agent pursuant to
the terms of this Guaranty shall be made in lawful money of the
United States of America, in immediately available funds, to
Agent at such address and account as Agent may hereafter specify
to Guarantor in writing, and shall be accompanied by a notice
from Guarantor stating that such payments are made under this
Guaranty.
4. Absolute Guaranty.
Guarantor agrees that the liability hereunder shall be the
immediate, direct and primary obligation of Guarantor and shall
not be contingent upon Agent's exercise or enforcement of any
remedy it may have against Borrower or any other Person. Without
limiting the generality of the foregoing, the Guaranty
Obligations shall remain in full force and effect without regard
to and shall not be impaired or affected by, nor shall Guarantor
be exonerated or discharged by, any of the following events:
(a) Insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition, assignment for the benefit of creditors,
death, liquidation, winding up or dissolution of Borrower,
Guarantor or any other guarantor of the Liabilities;
(b) Any limitation, discharge or cessation of the
liability of Borrower, Guarantor or any other guarantor for the
Liabilities due to any statute, regulation or rule of law, or any
invalidity or unenforceability in whole or in part of the Loan
Documents or any other guaranty of the Liabilities;
(c) Any merger, acquisition, consolidation or change in
structure of Borrower, Guarantor or any other guarantor of the
Liabilities; or any sale, lease, transfer or other disposition of
any or all of the assets or shares of Borrower, Guarantor or any
other guarantor of the Liabilities;
(d) Any assignment or other transfer, in whole or in
part, of Agent's or any Lender's interests in and rights under
the Credit Agreement and this Guaranty, including, without limitation,
Agent's right to receive payment of the Liabilities and the
Guaranty Obligations; or any assignment or other transfer, in
whole or in part, of Agent's interests in and to any collateral
security securing the Liabilities;
(e) Any claim, defense, counterclaim or setoff, other
than that of prior payment or performance, that Borrower, Guarantor
or any other guarantor of the Liabilities may have or assert,
including, but not limited to, any defense of incapacity or lack of
corporate or other authority to execute any documents relating to
the Liabilities, the Guaranty Obligations or any collateral
security for the Liabilities;
(f) Any cancellation, renunciation or surrender of any
debt instrument evidencing the Liabilities, other than due to the
complete prior and indefeasible payment or performance of such
instrument;
(g) Agent's amendment, modification, renewal or extension
of any documents or agreements relating to the Credit Agreement, the
Liabilities, the Guaranty Obligations or any other collateral
security for the Liabilities, or Agent's exchange, release or
waiver of any collateral security for the Liabilities;
(h) Agent's exercise or non-exercise of any power, right
or remedy with respect to the Liabilities, the Guaranty Obligations
or any collateral security for the Liabilities, including, but
not limited to, Agent's compromise, release, settlement or waiver
with or of Borrower, Guarantor or any other Person;
(i) Agent's vote, claim, distribution, election,
acceptance, action or inaction in any bankruptcy case related to
the Liabilities, the Guaranty Obligations or any collateral security
for the Liabilities; and
(j) Any impairment or invalidity of any collateral
security for the Liabilities or any failure to perfect any of
Agent's liens thereon or therein.
5. Waivers. Guarantor hereby expressly waives (a) diligence,
presentment, demand for payment, protest, benefit of any statute
of limitations affecting Borrower's liability under the Loan
Documents or the enforcement of this Guaranty; (b) discharge due
to any disability of Borrower; (c) any defenses of Borrower to
obligations under the Loan Documents not arising under the
express terms of the Loan Documents or from a material breach
thereof by Agent which under the law has the effect of
discharging Borrower from the Liabilities as to which this
Guaranty is sought to be enforced; (d) the benefit of any act or
omission by Agent which directly or indirectly results in or aids
the discharge of Borrower from any of the Liabilities by
operation of law or otherwise; (e) all notices whatsoever,
including, without limitation, notice of acceptance of this
Guaranty and the incurring of the Liabilities; and (f) any
requirement that Agent exhaust any right, power or remedy or
proceed against Borrower or any other security for, or any other
guarantor of, or any other party liable for, any of the
Liabilities or any portion thereof. Guarantor specifically
agrees that it shall not be necessary or required, and Guarantor
shall not be entitled to require, that Agent or any Lender
(i) file suit or proceed to assert or obtain a claim for personal
judgment against Borrower for the Liabilities; (ii) make any
effort at collection or enforcement of the Liabilities from
Borrower; (iii) file suit or proceed to obtain or assert a claim
for personal judgment against Guarantor or any other guarantor or
other party liable for the Liabilities; (iv) make any effort at
collection of the Liabilities from any such party; (v) exercise
or assert any other right or remedy to which Agent or any Lender
is or may be entitled in connection with the Liabilities or any
security or guaranty relating thereto; or (vi) file or assert any
claim against assets of Borrower before or as a condition of
enforcing the liability of Guarantor under this Guaranty.
6. Representations and Warranties.
Guarantor hereby represents and warrants to Agent that:
(a) Guarantor (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State set
forth below its name on the signature pages hereto; and (ii) has
all requisite power and authority to execute and deliver this
Guaranty and each Loan Document executed and delivered by
Guarantor pursuant to the Credit Agreement or this Guaranty and
to perform its obligations thereunder and hereunder.
(b) The execution, delivery and performance by Guarantor
of this Guaranty (i) do not contravene Guarantor's charter documents
or any law or any contractual restriction binding on or affecting
Guarantor or by which Guarantor's property may be affected; (ii)
do not require any authorization or approval or other action by,
or any notice to or filing with, any governmental authority or
any other Person under any indenture, mortgage, deed of trust,
lease, agreement or other instrument to which Guarantor is a
party or by which Guarantor or any of its property is bound
except such as have been obtained or made; and (iii) do not,
except as contemplated by the Credit Agreement or this Guaranty,
result in the imposition or creation of any Lien upon the
property of Guarantor.
(c) This Guaranty has been duly executed and delivered
by Guarantor and constitutes a legal, valid, and binding obligation
of Guarantor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, or other
similar laws affecting the rights of creditors or by the
application of general equity principles;
(d) The incurrence of the Guarantor's obligations under
this Guaranty will not cause the Guarantor to (i) become insolvent;
(ii) be left with unreasonably small capital for any business or
transaction in which Guarantor is presently engaged or plans to
be engaged; or (iii) be unable to pay its debts as such debts
mature; and
(e) All representations and warranties contained in
this Guaranty shall be true, accurate and complete at the time of
Guarantor's execution of this Guaranty and shall continue to be
true until the Guaranty Obligations have been paid or otherwise
satisfied in full. Any misrepresentation or breach of any
warranty whatsoever contained in this Section 6 shall be deemed
material.
7. Consents.
Guarantor hereby consents that any or all of the following
actions may be taken or things done without notice to Guarantor
and without affecting the liability of Guarantor under this
Guaranty:
(a) The time for Borrower's performance of or compliance
with any of the Liabilities may be accelerated or extended or such
performance or compliance may be waived by Agent and Lenders
(including, without limitation, the renewal, extension,
acceleration or other change in the time of payment, or other
terms of, the Liabilities, such as an increase or decrease in the
rate of interest thereon);
(b) The terms of any of the Liabilities or any term or
condition contained in any of the Loan Documents may be amended as
provided for therein by Borrower, Agent and Lenders for the purpose of
adding any provisions thereto or changing in any manner the
rights or obligations of Agent, Lenders or of Borrower
thereunder;
(c) Any collateral for all or any part of the Liabilities
may be exchanged, surrendered or otherwise dealt with, and Agent's
interests thereunder may be released and may or may not be
perfected, all as Agent in its sole discretion may determine; and
(d) Agent may apply any collateral for the Liabilities
and direct the order or manner of sale thereof, including, without
limitation, a nonjudicial sale, as Agent may in its sole
discretion determine, all without affecting the liability of
Guarantor hereunder.
8. Information Concerning Borrower.
Guarantor acknowledges that it has, independently of and
without reliance on Agent, made its own credit analysis of
Borrower and performed its own legal review of this Guaranty and
the Loan Documents and is not relying on Agent with respect to
any of the aforesaid items. Guarantor agrees to keep adequately
informed from such means of any facts, events or circumstances
which might in any way affect Guarantor's risks hereunder. Agent
makes no representation of its interest in, or the priority or
perfection of Agent's interest in and to, any collateral security
for the Liabilities.
9. Defaults and Remedies.
9.1 Events of Default. It shall be an "Event of Default"
hereunder upon the occurrence of any one or more of the following
events:
(a) The occurrence of an Event of Default under or as
defined in the Credit Agreement;
(b) If any representation, warranty or covenant of
Guarantor made under this Guaranty or any statement or
certificate at any time given in writing by Guarantor pursuant
hereto or in connection herewith shall be false, misleading or
incomplete in any material respect when made;
(c) The commencement by Guarantor of a voluntary case
under the federal bankruptcy laws, as now constituted or hereafter
amended, or any other applicable federal or state bankruptcy,
insolvency or similar law; or the consent by Guarantor to the
appointment of a receiver, liquidator, assignee, trustee, custodian,
sequestrator, agent or other similar official for Guarantor for
any substantial part of its properties; or the making by
Guarantor of any assignment for the benefit of creditors; or
(d) The filing of a petition with a court having
jurisdiction over Guarantor to commence an involuntary case for
Guarantor under the federal bankruptcy laws, as now constituted or
hereafter amended, or any other applicable federal or state
bankruptcy, insolvency or similar law; or the appointment of a
receiver, liquidator, assignee, custodian, trustee, agent,
sequestrator, or other similar official for Guarantor for any
substantial part of its properties; or any substantial part of
Guarantor's property is subject to any levy, execution,
attachment, garnishment or temporary protective order and the
failure to obtain the dismissal of such petition within, or
appointment or the continuance of such decree or order is
unstayed and in effect for, a period of sixty (60) days from the
date of such filing, appointment or entry of such order or
decree.
9.2 Remedies. Upon the occurrence of an Event of Default
and so long as the same shall be continuing, all or any portion of
the Guaranty Obligations may, at the option of Agent and without
demand, notice or legal process of any kind, be declared, and
immediately shall become, due and payable.
10. Termination.
Immediately following the full, complete and indefeasible
payment, performance or other satisfaction of all the Guaranty
Obligations, except as otherwise provided herein (including
Section 11, below), all of Guarantor's obligations hereunder
shall at such time terminate.
11. Reinstatement.
This Guaranty shall remain in full force and effect and
continue to be effective if at any time payment and performance
of Borrower's Liabilities or the Guaranty Obligations, or any
part thereof, is, pursuant to applicable law, avoided, rescinded
or reduced in amount, or must otherwise be restored or returned
by any obligee of Borrower's Liabilities or the Guaranty
Obligations, whether as a "voidable preference," "fraudulent
conveyance" or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or
any part thereof, is avoided, rescinded, reduced, restored or
returned, Borrower's Liabilities or the Guaranty Obligations, as
the case may be, shall be reinstated and deemed reduced only by
such amount paid and not so avoided, rescinded, reduced, restored
or returned.
12. Miscellaneous.
12.1 Entire Agreement. This Guaranty constitutes and
contains the entire agreement of the parties and supersede any
and all prior and contemporaneous agreements, negotiations,
correspondence, understandings and communications between the
parties, whether written or oral, respecting the subject matter
hereof.
12.2 Assignability. This Guaranty shall be binding upon and
inure to the benefit of Guarantor and Agent and their respective
successors and assigns, except that Guarantor shall not have the
right to assign its rights hereunder or any interest herein
without the prior written consent of Agent.
12.3 Notices. Any notice or other communication hereunder to
any party shall be addressed and delivered (and shall be deemed
given) in accordance with the Credit Agreement to the addresses
set forth on the signature pages thereof and hereof.
12.4 No Waiver; Amendments. No failure on the part of Agent
or any Lender to exercise, no delay in exercising and no course of
dealing with respect to, 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. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
This Guaranty may not be amended or modified except by written
agreement between Guarantor and Agent, and no consent or waiver
hereunder shall be valid unless in writing and signed by Agent.
12.5 Counterparts. This Guaranty may be executed in any
number of separate counterparts, each of which, when so executed,
shall be deemed an original, and all of said counterparts taken
together shall be deemed to constitute but one and the same
instrument.
12.6 Severability. If any provision of this Guaranty is held
to be unenforceable under applicable law for any reason, it shall be
adjusted, if possible, rather than voided in order to achieve the
intent of the parties to the extent possible. In any event, all
other provisions of this Guaranty shall be deemed valid and
enforceable to the fullest extent possible under applicable law.
12.7 Governing Law. This Guaranty shall be governed by, and
construed in accordance with, the laws of the State of New York
as applied to contracts made and performed entirely within the
State of New York by residents of such State without giving
effect to any conflict of laws principle or rule that might
require the application of the laws of another jurisdiction.
12.8 Consent to Jurisdiction. GUARANTOR AND AGENT HEREBY AGREE
THAT ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY
OR ANY OF THE AGREEMENTS, DOCUMENTS OR INSTRUMENTS DELIVERED IN
CONNECTION HEREWITH MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK OR THE UNITED STATES OF AMERICA LOCATED IN NEW YORK, NEW
YORK AS AGENT MAY ELECT, AND, BY EXECUTION AND DELIVERY HEREOF,
GUARANTOR AND AGENT EACH ACCEPTS AND CONSENTS TO, FOR ITSELF AND
IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. GUARANTOR WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO STAY OR TO DISMISS
ANY ACTION OR PROCEEDING BROUGHT BEFORE SAID COURTS ON THE BASIS
OF FORUM NON CONVENIENS.
12.9 Waiver of Jury Trial. GUARANTOR AND AGENT EACH WAIVE
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN
GUARANTOR AND AGENT ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS GUARANTY OR ANY OTHER INSTRUMENT, DOCUMENT
OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS RELATED HERETO OR THERETO.
12.10 Waiver of Rights. UNTIL PAYMENT IN FULL OF THE
LIABILITIES, GUARANTOR HEREBY IRREVOCABLY WAIVES AND RELEASES:
(a) ANY AND ALL RIGHTS IT MAY HAVE AT ANY TIME
(WHETHER ARISING DIRECTLY OR INDIRECTLY, BY OPERATION OF LAW,
CONTRACT OR OTHERWISE) (i) TO ASSERT ANY CLAIM AGAINST BORROWER
OR ANY OTHER PERSON, OR AGAINST ANY DIRECT OR INDIRECT SECURITY,
ON ACCOUNT OF PAYMENTS MADE OR OBLIGATIONS PERFORMED BY GUARANTOR
PURSUANT TO THIS GUARANTY, INCLUDING WITHOUT LIMITATION ANY AND
ALL RIGHTS OF SUBROGATION, REIMBURSEMENT, EXONERATION, CONTRIBUTION
OR INDEMNITY, OR (ii) TO REQUIRE THE MARSHALING OF ANY ASSETS OF
BORROWER, WHICH RIGHT OF MARSHALING MIGHT OTHERWISE ARISE FROM
ANY SUCH PAYMENTS MADE OR OBLIGATIONS PERFORMED; AND
(b) ANY AND ALL RIGHTS THAT WOULD RESULT IN GUARANTOR
BEING DEEMED, UNDER THE UNITED STATES BANKRUPTCY CODE, A "CREDITOR"
OF THE BORROWER OR ANY OTHER PERSON, ON ACCOUNT OF PAYMENTS MADE OR
OBLIGATIONS PERFORMED BY GUARANTOR.
In Witness Whereof, Guarantor has caused this Guaranty to be
duly executed as of the date first written above.
Guarantor Micron PC, Inc.,
a Delaware corporation
--------
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
----------------------------------------
Its: President
-----------------------------------------
Notices to be sent to:
Micron PC, Inc.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: President
---------------------------
Facsimile: (000) 000-0000
---------------------------
Telephone: (000) 000-0000
---------------------------
Guarantor Micron Commercial Systems, Inc.,
a Delaware corporation
--------
By:/s/ Xxxxx X. Xxxxx
------------------------------------------
Name: Xxxxx X. Xxxxx
----------------------------------------
Its: President
-----------------------------------------
Notices to be sent to:
Micron Commercial Systems, Inc.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: President
----------------------
Facsimile: West Div. (000) 000-0000/East Div. (000) 000-0000
----------------------
Telephone: (000) 000-0000
----------------------
Guarantor Micron Government Systems, Inc.,
a Delaware corporation
--------
By:/s/ Xxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxx
----------------------------------------
Its: President
-----------------------------------------
Notices to be sent to:
Micron Government Systems, Inc.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: President
-----------------------
Facsimile: (000) 000-0000
-----------------------
Telephone: (000) 000-0000
-----------------------
Guarantor Micron Services, Inc.,
a Delaware corporation
--------
By:/s/ Nemo X. Xxxxxxx
------------------------------------------
Name: Nemo X. Xxxxxxx
----------------------------------------
Its: President
-----------------------------------------
Notices to be sent to:
Micron Services, Inc.
000 X. Xxxxxxx Xxxx, Xxxxx III
Xxxxx, XX 00000
Attention: President
-----------------------
Facsimile: (000) 000-0000
-----------------------
Telephone: (000) 000-0000
-----------------------
Approved And Accepted:
Credit Suisse First Boston, as Agent
By:/s/ Xxxxx X. Xxxxxx
---------------------------------
Printed Name: Xxxxx X. Xxxxxx
-----------------------
Title: Vice President
------------------------------
By:/s/ Xxxx X. Fatto
---------------------------------
Printed Name: Xxxx X. Fatto
-----------------------
Title: Assistant Vice President
------------------------------
Notices to be sent to:
Credit Suisse First Boston
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Fatto
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
