EXHIBIT 10.5
GUARANTY OF PAYMENT AND PERFORMANCE
BOGEN CORPORATION
THIS Guaranty dated April 21, 1998 (the "Guaranty") from BOGEN
CORPORATION, a Delaware corporation with an office for the transaction of
business at 00 Xxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000 (whether individually or
if more than one, collectively, the "Guarantor") to KEYBANK NATIONAL
ASSOCIATION, a national banking association with an office for the transaction
of business located at 00 Xxxxx Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000 (in its
individual capacity, "Key"), as agent for the Banks.
W I T N E S S E T H :
WHEREAS, BOGEN COMMUNICATIONS INTERNATIONAL, INC. and BOGEN
COMMUNICATIONS, INC. (herein collectively called the "Borrower"), is about to
borrow from the Banks the sum of up to Twenty Seven Million and no/100
($27,000,000.00) Dollars, (the "Loan") in accordance with a certain Credit
Agreement of even date herewith (hereinafter, together with all exhibits
thereto, as it may from time to time be amended, modified or supplemented,
referred to as the "Credit Agreement") by and between the Borrower, the Banks
and Key as agent for the Banks; and
WHEREAS, the Banks are unwilling to make the Loan to the Borrower
unless it receives this Guaranty; and
WHEREAS, the Guarantor is willing to enter into this Guaranty in order
to induce the Banks to make the Loan and the Guarantor has approved the form and
substance of any documents executed or delivered by Borrower in connection with
the Loan (the "Loan Documents"); and
WHEREAS, all capitalized terms used herein which are defined in the
Credit Agreement shall have the respective meanings provided therefor in the
Credit Agreement, unless otherwise defined herein or unless the context
otherwise requires;
NOW, THEREFORE, in order to induce the Banks to make the Loan to the
Borrower and in consideration of the premises and of other good and valuable
consideration, the Guarantor intends to guarantee absolutely and unconditionally
(and jointly and severally if there be more than one Guarantor) to the Banks,
the punctual payment of the Loan and all notes or other evidences of
indebtedness given by the Borrower to the Banks in connection therewith and all
extensions, modifications or renewals thereof (collectively, the "Note") and all
interest and other sums due under the Note or any Loan Document and such further
payment and performance as may be set forth in Article 2 hereof.
ARTICLE 1
REPRESENTATIONS AND WARRANTIES OF THE GUARANTORS
The Guarantor hereby represents and warrants to the Banks (if the
Guarantor is more than one party, said representations and warranties are made
only with respect to the particular party) that:
Section 1.1 Capacity of the Guarantor. Each Guarantor:
(A) Has the capacity to enter into this Guaranty.
(B) Has an office for the transaction of business at the
address set forth at the head of this Guaranty.
Section 1.2 No Violation of Restrictions. Neither the execution and
delivery of this Guaranty, the consummation of the transactions contemplated
hereby nor the fulfillment of or compliance with the provisions of this Guaranty
will conflict with or result in a breach of any of the terms, covenants,
conditions or provisions of any agreement, judgment or order to which any party
named as a Guarantor is a party or by which the Guarantor is bound, or will
constitute a default under any of the foregoing, or result in the creation or
imposition of any lien of any nature whatsoever.
Section 1.3 Compliance with Law. Each party named as a Guarantor (A) is
not in violation of any law, ordinance, governmental rule, regulation, order or
judgment to which the Guarantor may be subject or which would materially affect
the business of the Guarantor and (B) has not failed to obtain any license,
permit, franchise or other governmental authorization necessary to the conduct
of their present business.
Section 1.4 Financial Statements. The financial statements submitted by
each party named as Guarantor, including balance sheets, statement of income,
retained earnings and other related schedules, to the Banks fairly represent the
financial condition as of the date of each statement and there has been no
adverse change in the financial condition of any Guarantor since the date of the
respective statements submitted to the Banks.
Section 1.5 Solvency of Guarantor and Borrower. Each party named as a
Guarantor is solvent and each Guarantor has made an appropriate financial
investigation of the Borrower and has determined that the Borrower is solvent at
the time of execution of this Guaranty.
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ARTICLE 2
COVENANTS AND AGREEMENTS
Section 2.1 Guaranty of Payment. The Guarantor (jointly and severally,
if there be more than one Guarantor) irrevocably, absolutely and unconditionally
guarantees to the Banks:
(A) The punctual payment of the Loan, the Note, all principal
and interest due thereunder and any other sums due under the Note or any Loan
Document.
(B) The full and prompt payment and performance of any and all
obligations of Borrower to the Banks under the Loan Documents including, without
limitation, the obligations of Borrower concerning hazardous materials and other
environmental matters contained in any of the Loan Documents.
Section 2.2 Obligations Unconditional. This Guaranty shall remain in
full force and effect until the Loan, the Note and all sums due thereunder or
under any Loan Document are paid in full, irrespective of any interruptions in
the business relationships of the Borrower and the Guarantor with the Banks, and
shall not be affected, modified or impaired by any state of facts or the
happening from time to time of any event, including, without limitation, any of
the following, whether or not with notice to or the consent of the Guarantor:
(A) The invalidity, irregularity, illegality or
unenforceability of, or any defect in, the Note or any Loan Document or
any collateral security for the Loan (the "Collateral").
(B) Any present or future law or order of any government (de
jure or de facto) or of any agency thereof purporting to reduce, amend
or otherwise affect the Note or any other obligation of the Borrower or
any other obligor or to any other terms of payment.
(C) The waiver, compromise, settlement, release or termination
of any or all of the obligations, covenants or agreements of the
Borrower under the Note or any Loan Documents or of any party named as
a Guarantor under this Guaranty.
(D) The loss, release, sale, exchange, surrender or other
change in any Collateral.
(E) The extension of the time for payment of any principal of
or interest on the Note or of the time for performance of any other
obligations, covenants or agreements under or arising out of the Note
or any Loan Document or the extension or the renewal of any thereof.
(F) The modification or amendment (whether material or
otherwise) of any obligation, covenant or agreement set forth in the
Note or any Loan Document.
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(G) The taking of, or the omission to take, any of the actions
referred to in the Note or any Loan Document.
(H) Any failure, omission or delay on the part of the Banks to
enforce, assert or exercise any right, power or remedy conferred on the
Banks in the Note or any Loan Document.
(I) The voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all the assets,
marshalling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition with creditors or readjustment of, or other
similar proceedings affecting the Guarantor or the Borrower or any of
their assets, or any allegation or contest of the validity of the Note
or any Loan Document.
(J) The default or failure of the Guarantor to fully perform
any obligations set forth in this Guaranty.
(K) Any event or action that would, in the absence of this
paragraph, result in the release or discharge of the Guarantor from the
performance or observance of any obligation, covenant or agreement
contained in this Guaranty.
(L) Any other circumstances which might otherwise constitute a
legal or equitable discharge or defense of a surety or a guarantor.
Section 2.3 Waiver by Guarantor. The Guarantor hereby waives:
(A) Notice of acceptance of this Guaranty.
(B) Diligence, presentment and demand for payment of the Loan
and/or the Note.
(C) Protest and notice of protest, dishonor or default to the
Guarantor or to any other party with respect to the Loan.
(D) Any and all notices to which the Guarantor might otherwise
be entitled.
(E) Any demand for payment under this Guaranty.
(F) Any and all defenses to payment including, without
limitation, any defenses and counterclaims of the Guarantor or the
Borrower based upon fraud, negligence or the failure of any condition
precedent or claims of offset or defenses involving the invalidity,
irregularity or unenforceability of all or any part of the liabilities
herein guaranteed or any defense otherwise available to the Guarantor
or the Borrower.
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(G) Any and all rights of subrogation, reimbursement,
indemnity, exoneration, contribution or any other claim which the
Guarantor may now or hereafter have against the Borrower or any other
person directly or contingently liable for the Loan guaranteed
hereunder, or against or with respect to the Borrower's property
(including, without limitation, property collateralizing the Loan),
arising from the existence or performance of this Guaranty and whether
or not such claim, right or remedy arises in equity, under contract, by
statute, under common law or otherwise.
Section 2.4 Nature of Guaranty. This Guaranty is a guaranty of payment
and not of collection and the Guarantor hereby waives the right to require that
any action be brought first against the Borrower or any other Guarantor, or any
security, or to require that resort be made to any security or to any balance of
any deposit account on credit on the books of the Banks in favor of the Borrower
or of any Guarantor.
Section 2.5 Continuation of Guaranty. The Guarantor further agrees that
the obligations hereunder shall continue to be effective or reinstated, as the
case may be, if at any time payment or any part thereof of the Loan or the Note
is rescinded or must otherwise be restored by the Banks upon the bankruptcy or
reorganization of the Borrower, the Guarantor or otherwise.
Section 2.6 Subordination of Debt. The Guarantor hereby subordinates
any and all indebtedness of Borrower now or hereafter owed to Guarantor to all
indebtedness of Borrower to the Banks and agrees with the Banks that Guarantor
shall not demand or accept any payment from Borrower, shall not claim any offset
or other reduction of Guarantor's obligations hereunder because of any such
indebtedness and shall not take any action to obtain any interest in any of the
security described in and encumbered by the Loan Documents; provided, however,
that, if the Banks so request, such indebtedness shall be collected, enforced
and received by Guarantor as trustee for the Banks and paid over to the Banks on
account of the indebtedness of Borrower to the Banks, but without reducing or
affecting in any manner the liability of Guarantor under the other provisions of
this Guaranty except to the extent the principal amount of such outstanding
indebtedness shall have been reduced by such payment.
Section 2.7 Financial Statements. Guarantor will advise the Banks in
writing if Guarantor operates on other than a calendar year basis. Guarantor
will at all times keep proper books of record and account in which full, true
and correct entries shall be made in accordance with generally accepted
accounting principles and will deliver to the Banks the reports, certificates
and other information described in Section 10.1 of the Credit Agreement.
Section 2.8 Transfer of Interest. Guarantor agrees not to make or
permit to be made, by a voluntary or involuntary means, any transfer of the
interest of Guarantor in the Borrower, without first obtaining the prior written
consent of the Banks.
Section 2.9 Financial Covenants. Guarantor will comply with the
financial covenants
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described in Section 10.6 of the Credit Agreement.
ARTICLE 3
EVENTS OF DEFAULT
Section 3.1 Events of Default Defined. An "Event of Default" shall
exist if any of the following occurs:
(A) Any party named as a Guarantor fails to perform or observe
any covenant contained herein.
(B) Any warranty, representation or other statement by or on
behalf of any party named as a Guarantor contained in this Guaranty is
false or misleading in any material respect when made.
(C) A receiver, liquidator or trustee of any party named as a
Guarantor or any of his or its property is appointed by court order, or
any party named as a Guarantor is adjudicated bankrupt or insolvent or
any of his or its property is sequestered by court order and such order
remains in effect for more than thirty (30) days, or a petition is
filed against any party named as a Guarantor under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, whether now or
hereafter in effect, and is not dismissed within thirty (30) days of
such filing.
(D) Any party named as a Guarantor files a petition in
voluntary bankruptcy or seeks relief under any provision of any
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, whether now or
hereafter in effect, or consents to the filing of any petition against
it under any such law.
(E) Any party named as a Guarantor makes an assignment for the
benefit of creditors or admits in writing inability to pay debts
generally as they become due, or consents to the appointment of a
receiver, trustee or liquidator of all or any part of his or its
property.
(F) The occurrence of an event of default under any other Loan
Document.
Section 3.2 Remedies on Default. If an event of default exists, the
Banks may proceed to enforce the provisions hereof and to exercise any other
rights, powers and remedies available to the Banks.
Section 3.3 Waiver and Notice.
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(A) No remedy herein conferred upon or reserved to the Banks
is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Guaranty now or
hereafter existing at law or in equity or by statute.
(B) No delay or omission to exercise any right or power
accruing upon the occurrence of any Event of Default shall impair any
such right or power or shall be construed to be a waiver thereof, but
any such right or power may be exercised from time to time and as often
as may be deemed expedient.
(C) In order to entitle the Banks to exercise any remedy
reserved to it in this Guaranty, it shall not be necessary to give any
notice, other than such notice as may be expressly required in this
Guaranty.
(D) No waiver, amendment, release or modification of this
Guaranty shall be established by conduct, custom or course of dealing.
ARTICLE 4
MISCELLANEOUS
Section 4.1 Construction. If this Guaranty is executed by two or more
parties, they shall be jointly and severally liable hereunder and the phrase
Guarantor whenever used herein shall be construed to refer to each of the
parties in the same manner and with the same effect as if each party had signed
a separate guaranty.
Section 4.2 Governing Law. This Guaranty shall be governed by and
construed in accordance with the laws of the State of New York.
Section 4.3 Submission to Jurisdiction. The Guarantor hereby
irrevocably and unconditionally agrees that any suit, action or proceeding
arising out of or relating to this Guaranty shall be brought in the state courts
of the State of New York or federal district court for the Northern District of
New York and waives any right to object to jurisdiction within either of the
foregoing forums by the Banks. Nothing contained herein shall prevent the Banks
from bringing any suit, action or proceeding or exercising any rights against
any security and against any Guarantor personally, and against any property of
any Guarantor, within any other jurisdiction and the initiation of such suit,
action or proceeding or taking of such action in any such other jurisdiction
shall in no event constitute a waiver of the agreements contained herein with
respect to the laws of the State of New York governing the rights and
obligations of the parties hereto or the agreement of the Guarantor to submit to
personal jurisdiction within the State of New York.
Section 4.4 Waiver of Jury Trial. The Guarantor and the Banks agree
that any suit,
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action or proceeding arising under or in connection with this Guaranty shall be
before a court without a jury.
Section 4.5 Successors and Assigns. This Guaranty shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto.
Section 4.6 Notices. Any notices required or permitted to be given
hereunder shall be: (i) personally delivered or (ii) given by registered or
certified mail, postage prepaid, return receipt requested, or (iii) forwarded by
overnight courier service, in each instance addressed to the addresses set forth
at the head of this Guaranty, or such other addresses as the parties may for
themselves designate in writing as provided herein for the purpose of receiving
notices hereunder. All notices shall be in writing and shall be deemed given, in
the case of notice by personal delivery, upon actual delivery, and in the case
of appropriate mail or courier service, upon deposit with the U.S. Postal
Service or delivery to the courier service.
Section 4.7 Entire Agreement. This Guaranty and the Note and other Loan
Documents constitute the entire understanding between Borrower, the Guarantor
and the Banks and to the extent that any writings not signed by the Banks or
oral statements or conversations at any time made or had are inconsistent with
the provisions of this Guaranty, the Note or the other Loan Documents, the same
shall be null and void.
Section 4.8 Amendments. No amendment, change, modification, alteration
or termination of this Guaranty shall be made except upon the written consent of
the parties hereto.
Section 4.9 Assignment. This Guaranty is assignable by the Banks in
whole or in part in conjunction with an assignment of the Note and any
assignment hereof or any transfer or assignment of the Note or portions thereof
shall operate to vest in any such assignee the rights and powers, in whole or in
part, as appropriate, herein conferred upon and granted to the Banks.
Section 4.10 Partial Invalidity. The invalidity or unenforceability of
any one or more phrases, sentences, clauses or sections in this Guaranty shall
not affect the validity or enforceability of the remaining portions of the
Guaranty or any part thereof.
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IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the
day and year first above written.
BOGEN CORPORATION
By:______________________________________________
Name:
Title:
STATE OF NEW JERSEY )
) ss.:
COUNTY OF )
On this __ day of April, 1998, before me the subscriber personally
appeared __________, who being by me duly sworn, did depose and say; that he
resides at __________, that he is __________ of Bogen Corporation, the
corporation described in and which executed the foregoing instrument; and that
he signed his name thereto by order of the Board of Directors of said
corporation.
_________________________________________________
NOTARY PUBLIC
