EXHIBIT 10.25
GUARANTY
This Guaranty (this "Guaranty") is dated as of October 28, 1997, by
XXXX/USA, INC., a Delaware corporation ("Guarantor"), in favor of SANWA BUSINESS
CREDIT CORPORATION, for itself, as lender, and as agent (the "Agent") for the
Lenders (as hereinafter defined), having an office at Xxx Xxxxx Xxxxxx Xxxxx,
00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000.
RECITALS
WHEREAS, XXXX/USA West, Inc., a Delaware corporation ("West"),
XXXX/USA Chicago, Inc., a Delaware corporation ("Chicago"), XXXX/USA New York,
Inc., a Delaware corporation ("New York") (West, Chicago and New York are
collectively referred to herein as the "Borrowers" and individually as a
"Borrower"), the Agent and the lenders named therein (the "Lenders"), have
entered into that certain Loan and Security Agreement of even date herewith (as
amended, supplemented or otherwise modified from time to time, the "Loan
Agreement") providing for the extension of loans and other financial
accommodations from Lenders to Borrowers; and
WHEREAS, Borrowers will become liable for their Obligations including,
without limitation, loans and other financial accommodations from the Lenders
(including the Agent in its individual capacity) under the Loan Agreement (all
Obligations being referred to herein as the "Guaranty Indebtedness");
WHEREAS, Guarantor owns 100% of the outstanding shares of each
Borrower;
WHEREAS, Guarantor will derive substantial direct and indirect
economic benefit and advantage from the financial accommodations to Borrowers
set forth in the Loan Agreement, including, without limitation, the loans and
advances made to Borrowers thereunder, and it will be to Guarantor's direct and
indirect economic benefit to assist Borrowers in procuring such financial
accommodations from the Lenders; and
WHEREAS, a condition precedent to Agent and Lenders entering into the
Loan Agreement is that the Guarantor execute and deliver this Guaranty;
NOW, THEREFORE, for and in consideration of the premises and in order
to induce Agent and Lenders to enter into the Loan Agreement and Lenders to make
loans thereunder, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor hereby agrees as
follows:
SECTION 1. DEFINITIONS.
Unless otherwise defined herein, all capitalized terms used herein
shall have the respective meanings assigned to such terms in the Loan Agreement.
SECTION 2. GUARANTY OF PAYMENT.
(a) Guarantor, jointly and severally, hereby absolutely and
unconditionally guarantees the full and prompt payment to Agent, for its benefit
and the benefit of Lenders, when due, upon demand, at maturity or by reason of
acceleration or otherwise and at all times thereafter, of any and all existing
and future Guaranty Indebtedness.
(b) Guarantor acknowledges that valuable consideration supports this
Guaranty, including, without limitation, the consideration set forth in the
recitals above as well as any commitment to lend, extension of credit or other
financial accommodation, whether heretofore or hereafter made by Lenders to
Borrowers; any extension, renewal or replacement of any of the Guaranty
Indebtedness; any forbearance with respect to any of the Guaranty Indebtedness
or otherwise; any purchase of any assets of Borrowers by the Lenders; or any
other valuable consideration.
(c) Guarantor agrees that all payments under this Guaranty shall be
made in United States currency and in the same manner as provided for in the
Guaranty Indebtedness.
SECTION 3. COSTS AND EXPENSES.
Guarantor agrees, jointly and severally, to pay on demand, if not paid
by Borrowers, all costs and expenses of every kind incurred by Agent or Lenders:
(a) in enforcing this Guaranty, (b) in collecting any of the Guaranty
Indebtedness from the Borrowers or Guarantor, (c) in realizing upon or
protecting any collateral for this Guaranty or for payment of any of the
Guaranty Indebtedness, and (d) for any other purpose related to the Guaranty
Indebtedness or this Guaranty. "Costs and expenses" as used in the preceding
sentence shall include, without limitation, reasonable attorneys' fees incurred
by Agent or any Lender in retaining counsel for advice, suit, appeal, any
insolvency or other proceedings under Title 11 of the United States Code (the
"BANKRUPTCY CODE") or otherwise, or for any purpose specified in the preceding
sentence.
SECTION 4. NATURE OF GUARANTY: CONTINUING, ABSOLUTE AND UNCONDITIONAL.
(b) This Guaranty is and is intended to be a continuing guaranty of
payment of the Guaranty Indebtedness, independent of and in addition to any
other guaranty, indorsement, collateral or other agreement held by Agent or
Lenders therefor or with respect thereto, whether or not furnished by Guarantor.
The obligations of Guarantor to repay the Guaranty Indebtedness hereunder shall
be unconditional.
(c) Until the Guaranty Indebtedness has been paid in full in cash,
Guarantor shall have no right, claim or remedy of subrogation, reimbursement,
contribution or any similar rights against Borrowers or any other guarantor with
respect to the Guaranty Indebtedness and hereby waives all such rights
including, without limitation, any right to enforce any remedy which Agent or
any Lender now has or may hereafter have against Borrowers, any endorser or any
other guarantor of all or any part of the Guaranty Indebtedness, and Guarantor
hereby waives any benefit of, and any right to participate in, any security or
collateral given to Agent, on behalf of the Lenders, to secure payment of the
Guaranty Indebtedness or any part thereof or any other liability of the Borrower
to Agent or the Lenders. If any amount shall be paid to any Guarantor on account
of any payment made hereunder at any time when the Guaranty Indebtedness shall
not have been paid in full in cash, such amount shall be held in trust for the
benefit of Agent and Lenders and shall forthwith be paid to Agent to be credited
and applied, whether the Guaranty Indebtedness is matured or unmatured, in
accordance with the terms of the Loan Agreement. Guarantor authorizes Agent, on
behalf of itself and Lenders, to take any action or exercise any remedy with
respect to such collateral which Agent, on behalf of itself and Lenders, in its
sole discretion shall determine, without notice to Guarantor. Guarantor further
agrees that any and all claims of Guarantor against Borrowers, any endorser or
any other guarantor of all or any part of the Guaranty Indebtedness, or against
any of their respective properties, whether arising by reason of any payment by
Guarantor to Agent, on behalf of itself and Lenders, pursuant to the provisions
hereof, or otherwise, shall be subordinate and subject in right of payment to
the prior payment, in full, of any and all principal and interest, all fees, all
reasonable costs of collection (including reasonable attorneys' fees and time
charges) and any other liabilities or obligations owing to Agent and Lenders by
the Borrowers which may arise either with respect to or on any note, instrument,
document, item, agreement or other writing heretofore, now or hereafter
delivered to any Lender or Agent. In the event Agent, on behalf of itself and
Lenders, in its sole discretion elects to give notice of any action with respect
to the collateral securing the Guaranty Indebtedness or any part thereof, ten
(10) days' written notice mailed to Guarantor by ordinary mail at the address
shown hereon shall be deemed reasonable notice of any matters contained in such
notice. Guarantor consents and agrees that Agent, on behalf of itself and
Lenders, shall be under no obligation to xxxxxxxx any assets in favor of
Guarantor or against or in payment of any or all of the Guaranty Indebtedness.
(d) For the further security of Agent and Lenders and without in any
way diminishing the liability of Guarantor, following the occurrence of an Event
of Default and acceleration of the Guaranty Indebtedness of Borrowers, all debts
and liabilities, present or future of Borrowers to Guarantor and all monies
received from Borrowers or for its account by Guarantor in respect thereof shall
be received in trust for Lenders and forthwith upon receipt shall be paid over
to Agent, for the benefit of itself and Lenders, until all of such Guaranty
Indebtedness has been paid in full. The obligations of Guarantor in the
preceding sentence shall be independent of and severable from this Guaranty and
shall remain in full force and effect whether or not Guarantor is liable for any
amount under this Guaranty.
(e) This Guaranty and Guarantor's obligations hereunder are absolute
and unconditional and shall not be changed or affected by any representation,
oral agreement, act or thing whatsoever. This Guaranty is intended by Guarantor
to be the final, complete and exclusive expression of the guaranty agreement
between Guarantor and Agent, on behalf of Lenders. No modification or amendment
of any provision of this Guaranty shall be effective unless in writing and
signed by a duly authorized officer of Agent, on behalf of the Lenders.
SECTION 5. CERTAIN RIGHTS AND OBLIGATIONS.
(a) Guarantor authorizes Agent and Lenders, without notice, demand or
any reservation of rights against Guarantor and without impairing or affecting
the validity or enforceability of this Guaranty or Guarantor's obligations
hereunder, from time to time: (i) to renew, extend, increase, accelerate or
otherwise change the time for payment of, the terms of or the interest on the
Guaranty Indebtedness or any part thereof or grant other indulgences to any
Borrower or other Persons; (ii) to accept from any Person and hold collateral
for the payment of the Guaranty Indebtedness or any part thereof, and to modify,
exchange, enforce or refrain from enforcing, or release, compromise, settle,
waive, subordinate or surrender, with or without consideration, such collateral
or any part thereof; (iii) to accept and hold any endorsement or guaranty of
payment of the Guaranty Indebtedness or any part thereof, and to discharge,
release or substitute any such obligation of any such endorser or guarantor, or
any Person who has given any security interest in any collateral as security for
the payment of the Guaranty Indebtedness or any part thereof, or any other
Person in any way obligated to pay the Guaranty Indebtedness or any part
thereof, and to enforce or refrain from enforcing, or compromise or modify, the
terms of any obligation of any such indorser, guarantor, or Person; (iv) subject
to the notice provision set forth in SECTION 4 hereof, to dispose of any and all
collateral securing the Guaranty Indebtedness in any manner as Agent or Lenders,
in its or their sole discretion, may deem appropriate, and to direct the order
or manner of such disposition and the enforcement of any and all endorsements
and guaranties relating to the Guaranty Indebtedness or any part thereof as
Agent or Lenders, in its or their sole discretion, may determine; (v) except as
otherwise provided in the Loan Agreement, to determine the manner, amount and
time of application of payments and credits, if any, to be made on all or any
part of any component or components of the Guaranty Indebtedness (whether
principal, interest, fees, costs, and expenses, or otherwise) including, without
limitation, the application of payments received from any source to the payment
of indebtedness other than the Guaranty Indebtedness even though the Agent and
the Lenders might lawfully have elected to apply such payments to the Guaranty
Indebtedness or to amounts which are not covered by this Guaranty; and (vi) to
take advantage or refrain from taking advantage of any security or accept or
make or refrain from accepting or making any compositions or arrangements when
and in such manner as Agent or Lenders, in its or their sole discretion, may
deem appropriate and generally do or refrain from doing any act or thing which
might otherwise, at law or in equity, release the liability of Guarantor as a
guarantor or surety in whole or in part, and in no case shall Agent or Lenders
be responsible or shall Guarantor be released either in whole or in part for any
act or omission in connection with Agent or Lenders having sold any collateral
at less than fair market value.
(b) If any default shall be made in the payment of any of the Guaranty
Indebtedness and any grace period has expired with respect thereto, Guarantor
hereby agrees to pay the same in full to the extent hereinafter provided: (i)
without deduction by reason of any setoff, defense (other than payment) or
counterclaim of any Borrower; (ii) without requiring presentment, protest or
notice of nonpayment or notice of default to Guarantor, to any Borrower or to
any other Person; (iii) without demand for payment or proof of such demand or
filing of claims with a court in the event of receivership, bankruptcy or
reorganization of any Borrower; (iv) without requiring the Agent or the Lenders
to resort first to any Borrower (this being a guaranty of payment and not of
collection) or to any other guarantor or any other Person obligated with respect
to the Guaranty Indebtedness or any collateral which the Lenders may hold; (v)
without requiring notice of acceptance hereof or assent hereto by the Agent or
the Lenders; and (vi) without requiring notice that any of the Guaranty
Indebtedness has been incurred, extended or continued or of the reliance by the
Agent or the Lenders upon this Guaranty; all of which Guarantor hereby waives.
(c) This Guaranty and Guarantor's obligation hereunder shall at all
times be valid and enforceable and shall not be impaired or affected by any
other agreements or circumstances of any nature whatsoever which otherwise
constitute a defense to this Guaranty, including, without limitation, any of the
following, all of which Guarantor hereby waives to the extent permitted by law:
(i) any failure or omission to perfect or continue the perfection of any
security interest in or other lien on, or preserve rights to, any collateral
securing payment of any of the Guaranty Indebtedness or Guarantor's obligation
hereunder; (ii) the invalidity, unenforceability, propriety of manner of
enforcement of, or loss or change in priority of any such security interest or
other lien or guaranty of the Guaranty Indebtedness; (iii) any failure or
omission to protect, preserve or insure any such collateral; (iv) failure of
Guarantor to receive notice of any intended disposition of such collateral; (v)
any defense arising by reason of the cessation from any cause whatsoever of
liability of any Borrower including, without limitation, any failure, negligence
or omission by the Agent or the Lenders in enforcing their claims against any
Borrower; (vi) any waiver of any right, remedy or power or of any default with
respect to the Guaranty Indebtedness or any part thereof or any release,
settlement or compromise of any obligation of any Borrower; (vii) the invalidity
or unenforceability of any of the Guaranty Indebtedness or the invalidity or
unenforceability of any agreement relating thereto or with respect to any
collateral securing the Guaranty Indebtedness or any part thereof; (viii) any
change of ownership of any Borrower or the insolvency, bankruptcy or any other
change in the legal status of any Borrower; (ix) any change in, or the
imposition of, any law, decree, regulation or other governmental act which does
or might impair, delay or in any way affect the validity, enforceability or the
payment when due of the Guaranty Indebtedness; (x) the existence of any claim,
setoff or other right which Guarantor may have at any time against the Agent,
any Lender, any Borrower or any other guarantor in connection herewith or any
unrelated transaction; (xi) the failure of any Borrower or Guarantor to maintain
in full force, validity or effect or to obtain or renew when required all
governmental and other approvals, licenses or consents required in connection
with the Guaranty Indebtedness or this Guaranty, or to take any other action
required in connection with the performance of all obligations pursuant to the
Guaranty Indebtedness or this Guaranty; (xii) the Agent's election, on behalf of
the Lenders, in any case instituted under chapter 11 of the Bankruptcy Code, of
the application of section 1111(b)(2) of the Bankruptcy Code; (xiii) any
borrowing, use of cash collateral, or grant of a security interest by the
Borrower, as debtor in possession, under section 363 or 364 of the Bankruptcy
Code; (xiv) the disallowance of all or any portion of the Agent's or any of the
Lenders' claims for repayment of the Guaranty Indebtedness under section 502 or
506 of the Bankruptcy Code; or (xv) any other fact or circumstance which might
otherwise constitute grounds at law or in equity for the discharge or release of
Guarantor from its obligations hereunder, all whether or not Guarantor shall
have had notice or knowledge of any act or omission referred to in the foregoing
clauses (i) through (xiv) of this SUBSECTION 5(C). It is agreed that Guarantor's
liability hereunder is independent of any other guaranties or other obligations
at any time in effect with respect to the Guaranty Indebtedness or any part
thereof and that Guarantor's liability hereunder may be enforced regardless of
the existence, validity, enforcement or non-enforcement of any such other
guaranties or other obligations or any provision of any applicable law or
regulation purporting to prohibit payment by any Borrower of the Guaranty
Indebtedness in the manner agreed upon between the Agent and the Lenders and the
Borrower.
(d) Credit may be granted or continued from time to time by the Agent
and the Lenders to any Borrower without notice to or authorization from
Guarantor regardless of the Borrower's financial or other condition at the time
of any such grant or continuation. Neither the Agent nor any Lender shall have
an obligation to disclose or discuss with Guarantor its assessment of the
financial condition of any Borrower.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
Guarantor represents and warrants that:
(b) EXISTENCE. Guarantor (i) is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
or incorporation, as the case may be, and has been duly qualified to conduct
business and is in good standing in each other jurisdiction where its ownership
or lease of property or the conduct of its business requires such qualification;
(ii) has the requisite corporate authority and the legal right to own, pledge,
mortgage or otherwise encumber and operate its properties, to lease the property
it operates under lease and to conduct its business as now, heretofore and
proposed to be conducted; (iii) has all licenses, permits, consents or approvals
from or by, and has made all filings with, and has given all notices to, all
Governmental Authorities having jurisdiction, to the extent required for such
ownership, operation and conduct; (iv) is in compliance with its organizational
documents; and (v) is in compliance with all applicable provisions of law.
(c) AUTHORITY. Guarantor has full power, authority and legal right to
enter into this Guaranty and the other Financing Agreements to which it is a
party. The execution, delivery and performance by Guarantor of this Guaranty and
such other Financing Agreements: (i) have been duly authorized by all necessary
action on the part of Guarantor; (ii) are not in contravention of the terms of
Guarantor's articles of incorporation or bylaws or of any indenture, agreement
or undertaking to which Guarantor is a party or by which it or any of its
property is bound; (iii) do not and will not require any governmental consent,
registration or approval or the consent of any other Person that has not been
obtained; (iv) do not and will not contravene any contractual or governmental
restriction to which Guarantor or any of its property may be subject; and (v) do
not and will not, except as contemplated herein, result in the imposition of any
Lien upon any property of Guarantor under any existing indenture, mortgage, deed
of trust, loan or credit agreement or other material agreement or instrument to
which it is a party or by which it or any of its property may be bound or
affected. Guarantor has the full corporate authority to own or lease and operate
its property and to conduct the business in which it is currently engaged and in
which it proposes to engage.
(d) BINDING EFFECT. This Guaranty and all of the other Financing
Agreements to which Guarantor is a party have been duly executed and delivered
by Guarantor, are the legal, valid and binding obligations of Guarantor and are
enforceable against Guarantor in accordance with their terms except as
enforceability may be limited by bankruptcy, insolvency, or similar laws
affecting the rights of creditors generally or by application of general
principles of equity.
(e) SOLVENCY. Guarantor is Solvent and will continue to be Solvent
following the consummation of the transactions contemplated by this Guaranty and
the other Financing Agreements.
(f) TAX OBLIGATIONS. Guarantor and its Subsidiaries have filed
complete and correct federal, state and local tax reports and returns required
to be filed, prepared in accordance with applicable laws or regulations, and,
except for extensions duly obtained, have either duly paid all taxes, duties and
charges owed, or made adequate provisions for the payment thereof. There are no
material unresolved questions or claims concerning any tax liability of
Guarantor or any Subsidiary.
(g) LITIGATION AND PROCEEDINGS. Except as set forth on SCHEDULE 6(F)
hereto, no action, claim or proceeding is now pending or, to the best knowledge
of Guarantor, threatened against or affecting Guarantor or any of its
Subsidiaries, before any Governmental Authority, or before any arbitrator or
panel of arbitrators, nor, to the best knowledge of Guarantor, does a state of
facts exist which is reasonably likely to give rise to such proceedings. None of
the actions, claims or proceedings set forth on SCHEDULE 6(F) (i) challenges
Guarantor's or such Subsidiary's right or power to enter into or perform any of
its obligations under the Financing Agreements, or the validity or
enforceability of any Financing Agreement or any action taken thereunder or (ii)
if adversely determined, could reasonably be expected to have a Material Adverse
Effect.
(h) COMPLIANCE WITH LAWS AND REGULATIONS. The execution and delivery
by Guarantor of this Guaranty and all of the other Financing Agreements to which
it is a party and the performance of Guarantor's obligations hereunder and
thereunder are not in contravention of any order applicable to Guarantor or, to
Guarantor's best knowledge, any laws, regulations or ordinances applicable to
Guarantor. Guarantor is in compliance with all applicable laws, orders,
regulations and ordinances of all federal, foreign, state and local governmental
authorities relating to the business operations and the property of Guarantor or
any of its Subsidiaries.
(i) FULL DISCLOSURE. This Guaranty and the representations and
warranties of Guarantor in any other Financing Agreement delivered or to be
delivered by Guarantor, do not and will not contain any untrue statement of a
material fact or omit a material fact necessary to make the statements contained
therein or herein, in light of the circumstances under which they were made, not
misleading. There is no material fact which Guarantor has not disclosed to the
Agent in writing which has had or, so far as Guarantor can now foresee, will
have a Material Adverse Effect.
(j) SUBSIDIARIES. SCHEDULE 6(I) hereto contains an accurate list of
all of the existing Subsidiaries of Guarantor as of the date of this Guaranty,
setting forth their respective jurisdictions of incorporation or organization
and the percentage of their capital stock or partnership interests owned by
Guarantor or other of its Subsidiaries.
(k) NEGATIVE PLEDGE. Guarantor is not a party to or bound by any
indenture, contract, instrument or other agreement which prohibits the creation,
incurrence or sufferance to exist of any Lien upon its property, except the
Financing Agreements.
(l) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties contained in this Guaranty or any of the other Financing
Agreements to which Guarantor is a party shall survive the execution and
delivery of this Guaranty and the termination hereof.
SECTION 7. COVENANTS
Guarantor covenants and agrees that until the Guaranty Indebtedness is
paid in full in cash and the Commitments are terminated:
(a) Guarantor shall: (i) do or cause to be done all things necessary
to preserve and keep in full force and effect its existence as a corporation and
its rights and franchises and (ii) continue to conduct its business as permitted
hereunder or under the Loan Agreement;
(b) Guarantor shall comply in all material respects with all federal,
state, local and foreign laws and regulations applicable to it, including,
without limitation, those relating to licensing, ERISA, Environmental Laws and
labor matters.
(c) Guarantor shall not (i) engage in any business activity other than
the ownership and management of the Borrowers and Persons with respect to
Permitted Acquisitions and the related activities incidental thereto; (ii)
directly or indirectly incur or assume or suffer to exist any Indebtedness other
than (x) the Seller Obligations and (y) Indebtedness to any Borrower in
connection with a Permitted Acquisition, Investments (other than its Investment
in the Borrowers and Persons with respect to Permitted Acquisitions and
Investments in cash and Cash Equivalents in an aggregate amount not to exceed
100,000 at any one time) or Guaranty (other than this Guaranty or guaranties of
Indebtedness of Borrowers permitted under the Loan Agreement); (iii) incur on
behalf of Guarantor or its Subsidiaries obligations with respect to management
or consulting or similar fees to non-affiliates in excess of $350,000 in the
aggregate in any Fiscal Year; (iv) create or permit to exist any Lien on its
assets, other than Permitted Liens; (v) merge or consolidate with, acquire any
assets or Stock of, or otherwise combine with any Person other than with respect
to Permitted Acquisitions; (vi) make any change in its capital structure; (vii)
amend its articles of incorporation or bylaws other than any amendment that is
not, in the reasonable judgment of the Agent, adverse in any material respect to
the value of the interests or rights of the Agent or the Lenders thereunder or
the rights or interests of the Agent or the Lenders; (viii) except as otherwise
permitted by the Loan Agreement with respect to the Borrowers, sell, transfer,
convey, assign or otherwise dispose of any of its Property; (ix) execute any
agreements or contracts that would be prohibited by the Financing Agreements; or
(x) change its Fiscal Year. Notwithstanding the foregoing sentence, Guarantor
may engage in any activity incidental to the maintenance of the existence of
Guarantor and may enter into and perform the obligations of Guarantor under this
Agreement.
(d) Guarantor shall not (i) make any payment of principal or premium,
if any, or interest on, fees with respect to, redemption, prepayment,
conversion, exchange, purchase, repurchase, retirement, defeasance, sinking fund
or other similar payment with respect to any Subordinated Debt, (ii) violate any
of the subordination provisions of the Subordination Agreement, (iii) amend,
waive or otherwise modify any provision of any Subordinated Debt or waive any
cause of action arising therefrom or related thereto; PROVIDED, that so long as
no Default or Event of Default has occurred and is continuing or would result
therefrom, Guarantor may make regularly scheduled payments of principal and
interest on the Seller Obligations in accordance with the terms of the
Subordination Agreement.
(e) Guarantor shall not enter into any indenture, agreement,
instrument or other arrangement which, (i) directly or indirectly, prohibits or
restrains, or has the effect of prohibiting or restraining, or imposes
materially adverse conditions upon, the incurrence of the obligations of
Guarantor hereunder, or (ii) contains any provisions which would be violated or
breached by the performance by Guarantor of its obligations hereunder.
(f) Guarantor shall cause the Borrowers to comply with all covenants
set forth in the Loan Agreement.
(g) On or before the Closing Date, Guarantor shall obtain a letter
from Xxxxxx Xxxxxxxx & Co. on which Agent shall be designated as a recipient,
acknowledging that Lenders intend to rely upon the financial statements of
Guarantor and its Subsidiaries certified by such accountants and that the
Lenders may rely upon such certification.
SECTION 8. TERMINATION.
This Guaranty shall remain in full force and effect until all of the
Guaranty Indebtedness shall be finally and irrevocably paid in full in cash and
the Commitments under the Loan Agreement shall have been terminated. Payment of
all of the Guaranty Indebtedness from time to time shall not operate as a
discontinuance of this Guaranty. Guarantor further agrees that, to the extent
that any Borrower makes a payment or payments to the Agent or any of the Lenders
on the Guaranty Indebtedness, or the Agent or the Lenders receive any proceeds
of collateral securing the Guaranty Indebtedness, which payment or receipt of
proceeds or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be returned or repaid to
such Borrower, its estate, trustee, receiver, debtor in possession or any other
Person, including, without limitation, any guarantor, under any insolvency or
bankruptcy law, state, federal or foreign law, common law or equitable cause,
then to the extent of such payment, return or repayment, the Guaranty
Indebtedness or part thereof which has been paid, reduced or satisfied by such
amount shall be reinstated and continued in full force and effect as of the date
when such initial payment, reduction or satisfaction occurred, and this Guaranty
shall continue in full force notwithstanding any contrary action which may have
been taken by the Agent or the Lenders in reliance upon such payment, and any
such contrary action so taken shall be without prejudice to the Agent's or the
Lenders' rights under this Guaranty and shall be deemed to have been conditioned
upon such payment having become final and irrevocable.
SECTION 9. GUARANTY OF PERFORMANCE.
Guarantor also guarantees the full, prompt and unconditional
performance of all obligations and agreements of every kind owed or hereafter to
be owed by the Guarantor or any Borrower to the Agent or the Lenders under or in
connection with the Financing Agreements. Every provision for the benefit of the
Agent or the Lenders contained in this Guaranty shall apply to the guaranty of
performance given in this SECTION 9.
SECTION 10. TAXES.
All payments hereunder shall be made without any counterclaim or
setoff, free and clear of, and without reduction by reason of, any taxes (except
income taxes of the Agent and the Lenders), levies, imposts, charges and
withholdings, restrictions or conditions of any nature ("TAXES"), which are now
or may hereafter be imposed, levied or assessed by any country, political
subdivision or taxing authority, all of which will be for the account of and
paid by Guarantor. If for any reason, any such reduction is made or any Taxes
are paid by the Agent or any Lender, Guarantor will pay to the Agent, for its
benefit and the benefit of the Lenders, such additional amounts as may be
necessary to ensure that the Agent and the Lenders receive the same net amount
which they would have received had no reduction been made or Taxes paid.
SECTION 11. SECURITY.
To secure payment of Guarantor's obligations under this Guaranty,
concurrently with the execution of this Guaranty, Guarantor is entering into the
Parent Pledge Agreement in favor of the Agent, for its benefit and the benefit
of the Lenders.
SECTION 12. MISCELLANEOUS.
(a) In addition to and without limiting any other right, power or
remedy of the Agent or any Lender, whenever the Agent or the Lenders have the
right to declare any of the Guaranty Indebtedness to be immediately due and
payable (whether or not it has been so declared), the Lenders at their sole
election without notice to Guarantor may appropriate and setoff against the
Guaranty Indebtedness: (i) any and all indebtedness or other monies due or to
become due to Guarantor by the Agent or the Lenders in any capacity; and (ii)
any monies, credits or other property belonging to Guarantor (including all
account balances, whether provisional or final and whether or not collected or
available) at any time held by or coming into the possession of the Agent or any
of the Lenders, or any affiliate of the Agent or any of the Lenders, whether for
deposit or otherwise, whether or not the Guaranty Indebtedness or the obligation
to pay such monies owed by the Agent or the Lenders is then due, and the Agent,
on its behalf and on behalf of the Lenders, is hereby granted a security
interest in and Lien upon such monies, credits and other property. The Agent or
the Lenders shall be deemed to have exercised such right of setoff immediately
at the time of such election even though any charge therefor is made or entered
on the Agent's or the Lenders' records subsequent thereto.
(b) In the event that acceleration of the time for payment of any of
the Guaranty Indebtedness is stayed, upon the insolvency, bankruptcy or
reorganization of the Borrower, or otherwise, all such amounts shall nonetheless
be payable by Guarantor forthwith upon demand by the Agent, on its behalf and on
behalf of the Lenders.
(c) No delay on the part of the Agent or any Lender in the exercise of
any right, power or remedy shall operate as a waiver thereof, and no single or
partial exercise by the Agent or any Lender of any right, power or remedy shall
preclude any further exercise thereof; nor shall any amendment, supplement,
modification or waiver of any of the terms or provisions of this Guaranty be
binding upon the Agent or the Lenders, except as expressly set forth in a
writing duly signed and delivered by the Agent. The failure by the Agent or any
Lender at any time or times hereafter to require strict performance by the
Borrower or any Guarantor of any of the provisions, warranties, terms and
conditions contained in any Financing Agreement or promissory note, security
agreement, agreement, indenture, guaranty, instrument or document now or at any
time or times hereafter executed by the Borrower or any Guarantor and delivered
to the Agent or any Lender shall not waive, affect or diminish any right of the
Agent or any Lender at any time or times hereafter to demand strict performance
thereof, and such right shall not be deemed to have been waived by any act or
knowledge of the Agent or any Lender, their agents, officers or employees,
unless such waiver is contained in an instrument in writing duly signed and
delivered by the Agent and/or the Lenders, as the case may be. No waiver by the
Agent or the Lenders of any default shall operate as a waiver of any other
default hereunder or the same default on a future occasion, and no action by the
Agent or the Lenders permitted hereunder shall in any way affect or impair the
Agent's or any Lender's rights, powers or remedies or the obligations of
Guarantor under this Guaranty. Any determination by a court of competent
jurisdiction of the amount of any Guaranty Indebtedness owing by the Borrower to
the Lenders shall be conclusive and binding on Guarantor irrespective of whether
the Borrower was a party to the suit or action in which such determination was
made. The rights and remedies of the Agent and the Lenders hereunder are
cumulative and may be exercised singly or concurrently, and are not exclusive of
any rights or remedies provided by law.
(d) This Guaranty shall bind Guarantor and the successors and assigns
of Guarantor and shall inure to the benefit of the Agent and the Lenders and
their successors and assigns. All references herein to any Lender shall for all
purposes also include all Participants. All references herein to the Borrower
shall be deemed to include its successors and assigns including, without
limitation, a receiver, trustee or debtor in possession of or for the Borrower.
(e) Section headings in this Guaranty are included herein for
convenience of reference only and shall not constitute a part of this Guaranty
for any other purpose or be given any substantive effect.
(f) Whenever possible, each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under applicable law.
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 remainder of such
provision or the remaining provisions of this Guaranty, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
(g) It is understood that while the amount of the Guaranty
Indebtedness is not limited, if, in any action or proceeding involving any state
or federal bankruptcy, insolvency or other law affecting the rights of creditors
generally, this Guaranty would be held or determined to be void, invalid or
unenforceable on account of the amount of the aggregate liability under this
Guaranty, then, notwithstanding any other provision of this Guaranty to the
contrary, the aggregate amount of such liability shall, without any further
action of Guarantor, the Lenders, the Agent or any other Person, be
automatically limited and reduced to the highest amount which is valid and
enforceable as determined in such action or proceeding.
(h) This Guaranty sets forth the entire understanding and agreement of
Guarantor and the Agent with respect to the subject matter hereof and supersedes
all other understandings, oral or written, with respect to the subject matter
hereof.
(i) Guarantor, jointly and severally, agrees to pay all costs, fees
and expenses (including reasonable attorneys' fees) incurred by the Agent or the
Lenders after a default by Guarantor under this Guaranty.
(J) GUARANTOR AND THE AGENT HEREBY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF XXXX,
STATE OF ILLINOIS, AND IRREVOCABLY AGREE THAT ALL ACTIONS OR PROCEEDINGS
RELATING TO THIS GUARANTY OR THE OTHER FINANCING AGREEMENTS TO WHICH GUARANTOR
IS A PARTY SHALL BE LITIGATED IN SUCH COURTS, AND GUARANTOR AND THE AGENT EACH
WAIVE ANY OBJECTION WHICH IT MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON
CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT AND EACH WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT, AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY MAIL OR MESSENGER DIRECTED TO IT AT THE ADDRESS
SET FORTH IN SECTION 13 HEREOF AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE
SUFFICIENT NOTICE. NOTHING CONTAINED IN THIS SECTION 12 SHALL AFFECT THE RIGHT
OF THE AGENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
AFFECT THE RIGHT OF THE AGENT TO BRING ANY ACTION OR PROCEEDING AGAINST
GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION TO THE EXTENT NECESSARY TO
ENFORCE ITS LIENS AGAINST ASSETS LOCATED IN SUCH JURISDICTION.
(K) THIS GUARANTY SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED UNDER
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF.
SECTION 13. NOTICES.
Except as otherwise expressly provided herein, any notice required or
desired to be served, given or delivered hereunder shall be in writing, and
shall be deemed to have been validly served, given or delivered (a) if delivered
in person, when delivered, (b) if delivered by telecopy or similar electronic
medium, on the date of confirmed transmission, (c) if delivered by overnight
courier, one (1) Business Day after delivery to such courier properly addressed
or (d) if by U.S. Mail, three (3) days after deposit in the United States mails
(by certified mail, return receipt requested), with proper postage prepaid, to
the following addresses:
Notices shall be addressed as follows:
(a) If to Guarantor:
XXXX/USA, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Financial Officer
Telecopy No.: (000) 000-0000
(b) If to Agent:
Sanwa Business Credit Corporation
Xxx Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Commercial Finance Division
Telecopy: (000) 000-0000
With a copy to:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxx
Telecopy: (000) 000-0000
or in any case, to such other address as the party addressed shall have
previously designated by written notice to the serving party, given in
accordance with this SECTION 13. A notice not given as provided above shall, if
it is in writing, be deemed given if and when actually received by the party to
whom given.
SECTION 14. WAIVERS.
(B) GUARANTOR WAIVES THE BENEFIT OF ALL VALUATION, APPRAISAL AND
EXEMPTION LAWS.
(C) IN THE EVENT OF A DEFAULT UNDER THE LOAN AGREEMENT, GUARANTOR
HEREBY WAIVES ALL RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE
BY THE AGENT OR THE LENDERS OF THEIR RIGHTS TO REPOSSESS ANY COLLATERAL WITHOUT
JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON ANY COLLATERAL WITHOUT PRIOR
NOTICE OR HEARING. GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF
ITS CHOICE WITH RESPECT TO THIS TRANSACTION AND THIS GUARANTY.
(D) GUARANTOR AND THE AGENT ACKNOWLEDGE THAT THE TIME AND EXPENSE
REQUIRED FOR TRIAL BY JURY EXCEED THE TIME AND EXPENSE REQUIRED FOR A BENCH
TRIAL AND HEREBY WAIVE, TO THE EXTENT PERMITTED BY LAW, TRIAL BY JURY, ANY
OBJECTION BASED ON FORUM NON CONVENIENS, ANY OBJECTION TO VENUE OF ANY ACTION
INSTITUTED HEREUNDER, AND WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND
WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF THE AGENT OR THE LENDERS.
(E) TO THE EXTENT PERMITTED BY LAW, GUARANTOR ABSOLUTELY,
UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY RIGHT TO ASSERT ANY DEFENSE, SETOFF,
COUNTERCLAIM OR CROSSCLAIM OF ANY NATURE WHATSOEVER WITH RESPECT TO THIS
GUARANTY OR THE OBLIGATIONS OF GUARANTOR HEREUNDER OR THE OBLIGATIONS OF ANY
OTHER PERSON OR PARTY (INCLUDING THE BORROWER) RELATING TO THIS GUARANTY, THE
GUARANTY INDEBTEDNESS OR THE OBLIGATIONS OF GUARANTOR IN ANY ACTION OR
PROCEEDING BROUGHT BY THE AGENT OR THE LENDERS TO COLLECT THE GUARANTY
INDEBTEDNESS OR TO ENFORCE THE OBLIGATIONS OF GUARANTOR HEREUNDER.
[signature page follows]
IN WITNESS WHEREOF, this Guaranty has been executed as of the date and
year first written above.
XXXX/USA, INC.
By: /S/ XXXXXX X. XXXXXXX
Title: EVP / CFO
