EXHIBIT 10.27
GUARANTY
THIS GUARANTY (this "Guaranty"), dated as of August 9, 2006 is by XXXXXXXX
X. XXXXXXXXX (the "Guarantor"), in favor of TD BANKNORTH, N.A., a national
banking association with an office at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx
00000, and its branches (the "Lender"). In consideration of the Lender giving,
in its discretion, time, credit or banking facilities or accommodations to IPG
PHOTONICS CORPORATION, a Delaware corporation, and its successors (the
"Borrower"), the Guarantor agrees as follows:
1. GUARANTY OF PAYMENT AND PERFORMANCE. The Guarantor hereby guarantees to
the Lender the full and punctual payment when due (whether at maturity, by
acceleration or otherwise), and the performance, of all liabilities, agreements
and other obligations of the Borrower to the Lender, whether direct or indirect,
absolute or contingent, due or to become due, secured or unsecured, now existing
or hereafter arising or acquired (whether by way of discount, letter of credit,
lease, loan, overdraft or otherwise) (the "Obligations"). This Guaranty is an
absolute, unconditional and continuing guaranty of the full and punctual payment
and performance of the Obligations and not of their collectibility only and is
in no way conditioned upon any requirement that the Lender first attempt to
collect any of the Obligations from the Borrower or resort to any security or
other means of obtaining their payment. Should the Borrower default in the
payment or performance of any of the Obligations, the obligations of the
Guarantor hereunder shall become immediately due and payable to the Lender,
without demand or notice of any nature, all of which are expressly waived by the
Guarantor. Payments by the Guarantor hereunder may be required by the Lender on
any number of occasions.
2. GUARANTOR'S AGREEMENT TO PAY. The Guarantor further agrees, as the
principal obligor and not as a guarantor only, to pay to the Lender, on demand,
all costs and expenses (including court costs and legal expenses) incurred or
expended by the Lender in connection with the Obligations, this Guaranty and the
enforcement thereof, together with interest on amounts recoverable under this
Guaranty from the time such amounts become due until payment, at the rate per
annum equal to four percent (4.00%) above the "Prime" Rate, fully floating (the
"Default Rate"); provided that if such interest exceeds the maximum amount
permitted to be paid under applicable law, then such interest shall be reduced
to such maximum permitted amount. The "Prime" Rate is that rate of interest
published in The Wall Street Journal (Eastern Edition) as the prevailing prime
rate. The Default Rate shall be adjusted from time to time on the effective date
of any change in the "Prime" Rate.
3. Recourse. Recourse by the Lender against the Guarantor under this
Guaranty shall be preceded by the sale or disposition of all Collateral, as
defined in a Loan and Security Agreement dated as of November 15, 2004 (as
amended from time to time, the "Loan Agreement"). Following the sale or
disposition of all Collateral, the Lender shall have recourse under this
Guaranty against the Guarantor for any Obligations which may continue to exist,
provided, however, that Lender may proceed directly against the Guarantor
without the prior sale of any Collateral in the event of (a) fraud, illegal,
improper or tortious misconduct in connection with the Obligations, or any other
obligation of the Guarantor or the Borrower to the Lender; (b) commencement of
proceedings in bankruptcy with respect to the Borrower pursuant to the United
States Bankruptcy Code; (c) the issuance of a stay or injunction after notice
and hearing preventing the Lender from exercising any
of its rights against the Collateral; (d) any attempt by the Guarantor, directly
or indirectly, to enjoin or otherwise interfere with the Lender in the
enforcement or collection of the Obligations or any other obligation of the
Guarantor or the Borrower to the Lender, or any right or remedy of the Lender in
connection therewith; or (e) upon the Lender's determination that an
environmental issue exists having a material adverse affect upon any Collateral
or its sale or disposition.
4. WAIVERS BY GUARANTOR; LENDER'S FREEDOM TO ACT. The Guarantor agrees that
the Obligations will be paid and performed strictly in accordance with their
respective terms 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 waives presentment, demand, protest,
notice of acceptance, notice of Obligations incurred and all other notices of
any kind, all defenses which may be available by virtue of any valuation, stay,
moratorium law or other similar law now or hereafter in effect, any right to
require the marshalling of assets of the Borrower, and all suretyship defenses
generally. Without limiting the generality of the foregoing, the Guarantor
agrees to the provisions of any instrument evidencing, securing or otherwise
executed in connection with any Obligation and agrees that the obligations of
the Guarantor hereunder shall not be released or discharged, in whole or in
part, or otherwise affected by (i) the failure of the Lender to assert any claim
or demand or to enforce any right or remedy against the Borrower; (ii) any
extensions or renewals of any Obligation; (iii) any rescissions, waivers,
amendments or modifications of any of the terms or provisions of any agreement
evidencing, securing or otherwise executed in connection with any Obligation;
(iv) the substitution or release of any entity primarily or secondarily liable
for any Obligation; (v) the adequacy of any rights the Lender may have against
any collateral or other means of obtaining repayment of the Obligations; (vi)
the impairment of any collateral securing the Obligations, including without
limitation the failure to perfect or preserve any rights the Lender might have
in such collateral or the substitution, exchange, surrender, release, loss or
destruction of any such collateral; or (vii) any other act or omission which
might in any manner or to any extent vary the risk of the Guarantor or otherwise
operate as a release or discharge of the Guarantor, all of which may be done
without notice to the Guarantor.
5. UNENFORCEABILITY OF OBLIGATIONS AGAINST BORROWER. If for any reason the
Borrower has no legal existence or is under no legal obligation to discharge any
of the Obligations, or if any of the Obligations have become unrecoverable from
the Borrower by operation of law or for any other reason, this Guaranty shall
nevertheless be binding on the Guarantor to the same extent as if the Guarantor
at all times had been the principal obligor on all such Obligations. In the
event that acceleration of the time for payment of the Obligations is stayed
upon the insolvency, bankruptcy or reorganization of the Borrower, or for any
other reason, all such amounts otherwise subject to acceleration under the terms
of any agreement evidencing, securing or otherwise executed in connection with
any Obligation shall be immediately due and payable by the Guarantor.
6. SUBROGATION; SUBORDINATION. Until the payment and performance in full of
all Obligations and any and all obligations of the Borrower to any affiliate of
the Lender, the Guarantor shall not exercise any rights against the Borrower
arising as a result of payment by the Guarantor hereunder, by way of subrogation
or otherwise, and will not prove any claim in competition with the Lender or its
affiliates in respect of any payment hereunder in bankruptcy or insolvency
proceedings of any nature; the Guarantor will not claim any set-off or
counterclaim against the Borrower in respect of any liability of the Guarantor
to the Borrower; and the Guarantor waives any benefit of and any
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right to participate in any collateral which may be held by the Lender or any
such affiliate. The payment of any amounts due with respect to any indebtedness
of the Borrower now or hereafter held by the Guarantor is hereby subordinated to
the prior payment in full of the Obligations, provided that so long as no
default in the payment or performance of the Obligations has occurred and is
continuing, or no demand for payment of any of the Obligations has been made
that remains unsatisfied, the Borrower may make, and the Guarantor may demand
and accept, any scheduled payments of principal of and interest on such
subordinated indebtedness in the amounts, at the rates and on the dates
specified in such instruments, securities or other writings as shall evidence
such subordinated indebtedness. The Guarantor agrees that after the occurrence
of any default in the payment or performance of the Obligations, the Guarantor
will not demand, xxx for or otherwise attempt to collect any such indebtedness
of the Borrower to the Guarantor until the Obligations shall have been paid in
full. If, notwithstanding the foregoing sentence, the Guarantor shall collect,
enforce or receive any amounts in respect of such indebtedness, such amounts
shall be collected, enforced and received by the Guarantor as trustee for the
Lender and be paid over to the Lender on account of the Obligations without
affecting in any manner the liability of the Guarantor under the other
provisions of this Guaranty.
7. SECURITY; SET-OFF. The Guarantor grants to the Lender, as security for
the full and punctual payment and performance of the Guarantor's Obligations
hereunder, a continuing lien on and security interest in all securities or other
property belonging to the Guarantor now or hereafter held by the Lender and in
all deposits (general or special, time or demand, provisional or final) and
other sums credited by or due from the Lender to the Guarantor or subject to
withdrawal by the Guarantor; and regardless of the adequacy of any collateral or
other means of obtaining repayment of the Obligations, the Lender is hereby
authorized 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, to set off and apply such deposits and other sums
against the obligations of the Guarantor under this Guaranty, whether or not the
Lender shall have made any demand under this Guaranty and although such
obligations may be contingent or unmatured.
8. FURTHER ASSURANCES. The Guarantor agrees that he will, from time to time
at the request of the Lender and in any event at least once every calendar year,
provide to the Lender a complete, accurate signed personal financial statement
in form satisfactory to the Lender. The Guarantor further agrees to provide the
Lender with copies of his federal and state income tax returns, as and when
filed with the appropriate taxing authorities, and at least within one hundred
twenty (120) days of the end of each calendar year. The Guarantor further agrees
to provide the Lender with such other information relating to the business and
affairs of the Guarantor as the Lender may reasonably request. The Guarantor
also agrees to do all such things and execute all such documents as the Lender
may consider necessary or desirable to give full effect to this Guaranty and to
perfect and preserve the rights and powers of the Lender hereunder.
9. TERMINATION; REINSTATEMENT. This Guaranty shall remain in full force and
effect until the Lender is given written notice of the Guarantor's intention to
discontinue this Guaranty, notwithstanding any intermediate or temporary payment
or settlement of the whole or any part of the Obligations. No such notice shall
be effective unless received by the Lender's Senior Commercial Loan Officer at
the notice address set forth in Section 12 hereof. No such notice shall affect
any rights of the Lender or of any affiliate hereunder including, without
limitation, the rights set forth in Sections 4 and 6, with respect to
Obligations incurred prior to the receipt of such
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notice or Obligations incurred pursuant to any contract or commitment in
existence prior to such receipt, and all checks, drafts, notes, instruments
(negotiable or otherwise) and writings made by or for the account of the
Borrower and drawn on the Lender or any of its agents purporting to be dated on
or before the date of receipt of such notice, although presented to and paid or
accepted by the Lender after that date, shall form part of the Obligations. This
Guaranty shall continue to be effective or be reinstated, notwithstanding any
such notice, if at any time any payment made or value received with respect to
an Obligation 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 or value received.
Notwithstanding the provisions set forth above, this Guaranty shall be
terminated and the Guarantor's obligations hereunder released, upon Borrower's
compliance, after completion of the IPO (as defined in the Loan Agreement), with
the financial covenants set forth in Sections 6.01(S) and 6.01(T) of the Loan
Agreement, tested for a full fiscal quarter.
10. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon the
Guarantor, its successors and assigns, and shall inure to the benefit of and be
enforceable by the Lender and its successors, transferees and assigns. Without
limiting the generality of the foregoing sentence, the Lender may assign or
otherwise transfer any agreement or any note held by it evidencing, securing or
otherwise executed in connection with the Obligations, or sell participations in
any interest therein, to any other person or entity, and such other person or
entity shall thereupon become vested, to the extent set forth in the agreement
evidencing such assignment, transfer or participation, with all the rights in
respect thereof granted to the Lender herein.
11. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by the Guarantor therefrom shall be
effective unless the same shall be in writing and signed by the Lender. No
failure on the part of the Lender 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.
12. NOTICES. All notices and other communications called for hereunder
shall be made in writing and, unless otherwise specifically provided herein,
shall be deemed to have been duly made or given when delivered by hand or mailed
first class mail postage prepaid or, in the case of telegraphic or telexed
notice, when transmitted, answer back received, addressed as follows: if to the
Guarantor, at the address set forth beneath its signature hereto, and if to the
Lender, at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, Attention: Senior
Commercial Loan Officer, or at such address as either party may designate in
writing
13. GOVERNING LAW; CONSENT TO JURISDICTION. This Guaranty is intended to
take effect as a sealed instrument and shall be governed by, and construed in
accordance with, the laws of The Commonwealth of Massachusetts. The Guarantor
agrees that any suit for the enforcement of this Guaranty may be brought in the
courts of The Commonwealth of Massachusetts or any Federal Court sitting therein
and consents to the non-exclusive jurisdiction of such court and to service of
process in any such suit being made upon the Guarantor by mail at the address
specified in Section 12 hereof. The Guarantor hereby waives any objection that
he may now or hereafter have to the venue of any such suit or any such court or
that such suit was brought in an inconvenient court.
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14. JURY TRIAL WAIVER. THE GUARANTOR AND THE LENDER EACH WAIVE THE RIGHT TO
A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING, WHETHER BY CLAIM OR
COUNTERCLAIM, BROUGHT OR INSTITUTED BY THE GUARANTOR, THE BORROWER, THE LENDER
OR ANY OF THEIR SUCCESSORS OR ASSIGNS, WHICH IN ANY WAY RELATES DIRECTLY OR
INDIRECTLY TO THIS GUARANTY, THE OBLIGATIONS OR THE RELATIONSHIP BETWEEN OR
AMONG THE GUARANTOR, THE LENDER, THE BORROWER OR ANY OF THEM.
15. MISCELLANEOUS. This Guaranty constitutes the entire agreement of the
Guarantor with respect to the matters set forth herein. The rights and remedies
herein provided are cumulative and not exclusive of any remedies provided by law
or any other agreement, and this Guaranty shall be in addition to any other
guaranty of the Obligations. The invalidity or unenforceability of any one or
more sections of this Guaranty shall not affect the validity or enforceability
of its remaining provisions. Captions are for the ease of reference only and
shall not affect the meaning of the relevant provisions. The meanings of all
defined terms used in this Guaranty shall be equally applicable to the singular
and plural forms of the terms defined.
16. REPLACEMENT GUARANTY. This Guaranty replaces all guarantees executed by
the Guarantor and delivered to the Lender, including without limitation that
certain Limited Guaranty dated as of November 15, 2004 and those certain
Unlimited Guaranties dated as of April 28, 2000 and May 3, 2005.
IN WITNESS WHEREOF, the Guarantor has executed and delivered this Guaranty
as a sealed instrument as of the date first set forth above.
Xxxxxx Xxxxxxx /s/ Xxxxxxxx X. Xxxxxxxxx
Witness ----------------------------------------
XXXXXXXX X. XXXXXXXXX
Address: 00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
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