GUARANTY
GUARANTY dated August 11, 2000, made by XxxXxxxxxx.Xxx, Inc., a Delaware
corporation (the "Guarantor"), in favor of Foothill Capital Corporation (the
"Lender").
W I T N E S S E T H :
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WHEREAS, TekInsight Services Inc., a Delaware corporation (as successor by
merger to Data Systems Network Corporation, the "Borrower") all or a majority of
the issued and outstanding shares of capital stock of which are owned by the
Guarantor, and the Lender are parties to a Loan and Security Agreement dated as
of September 30, 1998 (such Agreement, as amended or otherwise modified from
time to time, being hereinafter referred to as the "Financing Agreement");
WHEREAS, pursuant to the Financing Agreement the Lender has agreed to make
loans (the "Loans") and issue Letters of Credit to the Borrower in an aggregate
principal amount at any one time outstanding not to exceed the Maximum Amount
(as defined in the Financing Agreement);
WHEREAS, it is a condition precedent to the making and maintaining of the
Loans and the issuance of the Letters of Credit by the Lender pursuant to the
Financing Agreement that the Guarantor shall have executed and delivered to the
Lender a guaranty guaranteeing the obligations of the Borrower under the Loan
Documents (as defined in the Financing Agreement); and
WHEREAS, the Guarantor has determined that its execution, delivery and
performance of this Guaranty directly benefit, and are within the corporate
purposes and in the best interests of, the Guarantor;
NOW, THEREFORE, in consideration of the premises and the agreements herein
and in order to induce the Lender to make and maintain the Loans and continue to
issue the Letters of Credit pursuant to the Financing Agreement, the Guarantor
hereby agrees with the Lender as follows:
SECTION 1. Definitions. Reference is hereby made to the Financing Agreement
for a statement of the terms thereof. All terms used in this Guaranty which are
defined therein and not otherwise defined herein shall have the same meanings
herein as set forth therein.
SECTION 2. Guaranty. The Guarantor hereby (i) irrevocably, absolutely and
unconditionally guarantees the prompt payment by the Borrower, as and when due
and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), of all amounts now or hereafter owing in respect of the
Financing Agreement and the other Loan Documents, whether for principal,
interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Borrower),
reimbursement of drawings, cash collateral for letters of credit, premiums,
indemnities, fees, expenses or otherwise, and whether accruing before or
subsequent to the filing of a petition initiating a bankruptcy, reorganization,
liquidation or similar proceeding affecting the Borrower (notwithstanding the
operation of the automatic stay under Section 362(a) of the U.S. Bankruptcy
Code), and the due performance and observance by the Borrower of its other
obligations now or hereafter existing in respect of the Loan Documents (the
"Obligations"); and (ii) agrees to pay any and all expenses (including counsel
fees and expenses) incurred by the Lender in enforcing its rights under this
Guaranty. Without limiting the generality of the foregoing, the Guarantor's
liability shall extend to all amounts that constitute part of the Obligations
and would be owed by the Borrower under the Financing Agreement or other Loan
Documents but for the fact that such document is unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding
involving the Borrower.
SECTION 3. Guarantor's Obligations Unconditional.
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(a) The Guarantor hereby guarantees that the Obligations will
be paid strictly in accordance with the terms of the Loan Documents to which the
Borrower is a party, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Lender with respect thereto. The Guarantor agrees that this Guaranty constitutes
a guaranty of payment when due and not of collection and waives any right to
require that any resort be made by the Lender to any collateral. The obligations
of the Guarantor under this Guaranty are independent of the obligations under
the Financing Agreement and other Loan Documents, and a separate action or
actions may be brought and prosecuted against the Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against the Borrower or
whether the Borrower is joined in any such action. The liability of the
Guarantor hereunder shall be absolute and unconditional irrespective of: (i) any
lack of validity or enforceability of any Loan Document or any agreement or
instrument relating thereto; (ii) any change in the time, manner or place of
payment of, or in any other term in respect of, all or any of the Obligations,
or any other amendment or waiver of or consent to any departure from any Loan
Document (including, without limitation, any increase in the obligations of the
Borrower resulting from the extension of additional credit to the Borrower or
otherwise); (iii) any exchange or release of, or non-perfection of any lien on
or security interest in, any collateral, or any release or amendment or waiver
of or consent to any departure from any other guaranty, for all or any of the
Obligations; (iv) the existence of any claim, set-off, defense or other right
that the Guarantor may have at any time against any Person, including, without
limitation, the Lender; or (v) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the Borrower or any other
guarantor in respect of the Obligations or the Guarantor in respect hereof.
(b) This Guaranty (i) is a continuing guaranty and shall
remain in full force and effect until the satisfaction in full after the
termination of the Financing Agreement of the Obligations and the payment of the
other expenses to be paid by the Guarantor pursuant hereto; and (ii) shall
continue to be effective or shall be reinstated, as the case may be, if at any
time any payment of any of the Obligations is rescinded or must otherwise be
returned by the Lender upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise, all as though such payment had not been made.
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SECTION 4. Waivers. The Guarantor hereby waives (i)
promptness and diligence; (ii) notice of acceptance and notice of the incurrence
of any Obligation by the Borrower; (iii) notice of any actions taken by the
Lender or the Borrower under any Loan Document or any other agreement or
instrument relating thereto; (iv) all other notices, demands and protests, and
all other formalities of every kind in connection with the enforcement of the
Obligations or of the obligations of the Guarantor hereunder, the omission of or
delay in which, but for the provisions of this Section 4, might constitute
grounds for relieving the Guarantor of its obligations hereunder; (v) any right
to compel or direct the Lender to seek payment or recovery of any amounts owed
under this Guaranty from any one particular fund or source; and (vi) any
requirement that the Lender protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against the Borrower or any other Person or any collateral. The
Guarantor agrees that the Lender shall have no obligation to xxxxxxxx any assets
in favor of the Guarantor or against or in payment of any or all of the
Obligations.
SECTION 5. Subrogation. The Guarantor waives any claim, right
or remedy now existing or hereafter acquired against the Borrower hereunder or
from the performance by the Guarantor hereunder, including, without limitation,
any claim, right or remedy of subrogation, reimbursement, exoneration,
contribution, indemnification, claim, right or remedy of the Guarantor against
the Borrower, or any security that the Guarantor now owns or hereafter is
granted to the Guarantor, whether arising in equity, under contract, by statute
(including, without limitation, any such right arising under the United States
Bankruptcy Code), under common law or otherwise, and further agrees with the
Borrower for the benefit of each of its creditors (including, without
limitation, the Lender), that any such payment by it shall constitute, to the
fullest extent permitted by applicable law, an equity investment by the
Guarantor in the Borrower.
SECTION 6. Representations and Warranties. The Guarantor
hereby represents and warrants as follows:
(a) The Guarantor (i) is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation
as set forth on the first page hereof; and (ii) has all requisite power and
authority to execute, deliver and perform this Guaranty and each other Loan
Document to which the Guarantor is a party.
(b) The execution, delivery and performance by the Guarantor
of this Guaranty and each other Loan Document to which the Guarantor is a party
(i) have been duly authorized by all necessary corporate action, (ii) do not and
will not contravene its charter or by-laws, law or any contractual restriction
binding on or affecting the Guarantor or any of its properties, and (iii) do not
and will not result in or require the creation of any lien, security interest or
other charge or encumbrance upon or with respect to any of its properties.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or other regulatory body is
required for the due execution, delivery and performance by the Guarantor of
this Guaranty or any of the other Loan Documents to which the Guarantor is a
party.
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(d) Each of this Guaranty and the other Loan Documents to
which the Guarantor is a party is a legal, valid and binding obligation of the
Guarantor, enforceable against the Guarantor in accordance with its terms.
(e) There is no action, suit or proceeding pending or
threatened against or otherwise affecting the Guarantor before any court or
other governmental authority or any arbitrator which may materially adversely
affect the Guarantor's ability to perform its obligations hereunder or under the
other Loan Documents to which the Guarantor is a party.
(f) The Guarantor has, independently and without reliance upon
the Lender and based on documents and information as it has deemed appropriate,
made its own credit analysis ad decision to enter into this Guaranty.
SECTION 7. Right of Set-off. Upon the occurrence and during
the continuance of any Event of Default the Lender may, and is hereby authorized
to, at any time and from time to time, without notice to the Guarantor (any such
notice being expressly waived by the Guarantor) and to the fullest extent
permitted by law, set off 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 the Lender to or for the credit or the account of the
Guarantor against any and all obligations of the Guarantor now or hereafter
existing under this Guaranty, irrespective of whether or not the Lender shall
have made any demand under this Guaranty and although such obligations may be
contingent or unmatured. The Lender agrees promptly to notify the Guarantor
after any such set-off and application made by the Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Lender under this Section 7 are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Lender may have.
SECTION 8. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed (by certified
mail, postage prepaid and return receipt requested), telecopied or delivered, if
to the Guarantor, to it at its address at 0 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxxx Xxxxxxxx, Executive Vice President;
and if to the Lender, to its address at 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxx,
Xxxxx Xxxxxx, Xxxxxxxxxx 00000, Attention: Business Finance Division manager;
or, as to either such Person, at such other address as shall be designated by
such Person in a written notice to such other Person complying as to delivery
with the terms of this Section 8. All such notices and other communications
shall be effective (i) if sent by certified mail, return receipt requested, when
received or three Business Days after mailing, whichever first occurs, (ii) if
telecopied, when transmitted and confirmation is received, provided same is on a
Business Day and, if not, on the next Business Day, or (iii) if delivered, upon
delivery, provided same is on a Business Day and if not, on the next Business
Day.
SECTION 9. Submission to Jurisdiction; Waivers. The Guarantor
hereby irrevocably and unconditionally:
(a) Submits for itself and its property in any action, suit or
proceeding relating to this Guaranty or any other Loan Document to which it is a
party, or for recognition and
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enforcement of any judgment in respect thereof, to the non-exclusive
general jurisdiction of the courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and appellate
courts thereof;
(b) Agrees that any such action, suit or proceeding may be
brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action, suit or proceeding in any such court or
that such action, suit or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) Irrevocably consents to the service of any and all process
in any such action, suit or proceeding by the mailing of copies of such process
by registered or certified mail (or any substantially similar form of mail),
postage prepaid, to the Guarantor, at its address set forth in Section 8 hereof
or at such other address of which the Lender shall have been notified pursuant
thereto;
(d) To the extent that the 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, execution or otherwise) with respect to itself or its
property, the Guarantor hereby irrevocably waives such immunity in respect of
its obligations under this Guaranty;
(e) Agrees that nothing herein shall affect the right of the
Lender to effect service of process in any other manner permitted by law or
shall limit the right to xxx in any other jurisdiction; and
(f) Waives any right it may have to claim or recover in any
legal action or proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.
SECTION 10. Miscellaneous.
(a) The Guarantor will make each payment hereunder in lawful
money of United States of America and in same day funds to the Lender at its
address specified in Section 8 hereof.
(b) No amendment of any provision of this Guaranty shall be
effective unless it is in writing and signed by the Guarantor and the Lender,
and no waiver of any provision of this Guaranty, and no consent to any departure
by the Guarantor therefrom, shall be effective unless it is in writing and
signed by the Lender, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
(c) No failure on the part of the Lender to exercise, and no
delay in exercising, any right hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right preclude any other or further exercise thereof or the exercise of any
other right. The rights and remedies of the Lender provided herein and in the
other Loan Documents are cumulative and are in addition to, and not exclusive
of, any rights or remedies provided by law. The rights of the Lender under any
Loan Document against any party thereto are
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not conditional or contingent on any attempt by the Lender to exercise any
of its rights under any other Loan Document against such party or against any
other Person.
(d) 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 portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.
(e) This Guaranty shall (i) be binding on the Guarantor and
its successors and assigns, and (ii) inure, together with all rights and
remedies of the Lender hereunder, to the benefit of the Lender and its
successors, transferees and assigns. Without limiting the generality of clause
(ii) of the immediately preceding sentence, the Lender may assign or otherwise
transfer its rights under any Loan Document, to any other Person, and such other
Person shall thereupon become vested with all of the benefits in respect thereof
granted to the Lender herein or otherwise. None of the rights or obligations of
the Guarantor hereunder may be assigned or otherwise transferred without the
prior written consent of the Lender.
(f) This Guaranty shall be governed by and construed in
accordance with the law of the State of New York.
SECTION 11. Jury Trial Waiver. THE GUARANTOR AND THE LENDER
(BY ITS ACCEPTANCE OF THIS GUARANTY) HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
CONCERNING THIS GUARANTY, ANY LOAN DOCUMENT OR ANY AMENDMENT, MODIFICATION OR
OTHER DOCUMENT NOW OR HEREAFTER DELIVERED IN CONNECTION WITH ANY OF THE
FOREGOING, AND AGREE THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
by an officer thereunto duly authorized, as of the date first above written.
XXXXXXXXXX.XXX, INC.
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Chief Operating Officer
