GUARANTY
Dated as of August 30, 1999
This Guaranty is made by SBC COMMUNICATIONS INC., a corporation organized
or formed under the laws of State of Delaware (the "Guarantor") in favor of The
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Northern Trust Company, an Illinois state banking corporation (the "Lender").
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For valuable consideration the Guarantor agrees as follows:
SECTION 1. BASIC TERMS.
(a) In consideration of any loan, letter of credit issued for its
account or other financial accommodation heretofore, now or hereafter at
any time made or given, to OnePoint Communications Corp., a corporation
organized or formed under the laws of State of Delaware (the "Borrower"),
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by the Lender, the Guarantor hereby guarantees absolutely and
unconditionally the prompt payment when due, whether at maturity, by
declaration, by demand or otherwise, at any and all times thereafter, and
as otherwise set forth herein, of all indebtedness, reimbursement
obligation and other liabilities and obligations of the Borrower to the
Lender, direct or indirect, absolute or contingent, due or to become due,
now or hereafter existing under (i) that certain Call On Term - Term Note
dated as of August 30, 1999 (the "Note"), of the Borrower payable to the
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order of the Lender in the original principal amount of $16,000,000 (as
amended, renewed or replaced in accordance herewith) and (ii) any Letter of
Credit Application (as defined in the Note) in accordance herewith, subject
to Section 1(c) (all such indebtedness and liabilities, reimbursement
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obligations and obligations being hereinafter collectively called the
"Indebtedness").
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(b) In addition, the Guarantor agrees to pay or reimburse the Lender
for all costs and expenses of enforcing and preserving its rights under
this Guaranty and the Indebtedness (including reasonable legal fees and
reasonable time charges of attorneys, whether in or out of court, in
original or appellate proceedings or in bankruptcy).
(c) The amount of this Guaranty is expressly limited to an aggregate
amount not exceeding $16,000,000, including interest thereon and costs and
expenses as provided herein and Guarantor shall have no liability hereunder
for the Indebtedness or other liability hereunder in excess of the
aggregate amount of $16,000,000.
(d) The Guaranty shall remain in full force and effect until the
earlier of (i) the 366th day following the date the Indebtedness and all
amounts payable hereunder have been fully paid, and that all commitments
and obligations of the Lender with respect to the Indebtedness, and any
obligation of the Lender to extend credit to the Borrower, have terminated
and (ii) January 4, 2005.
SECTION 2. EVENTS REQUIRING PAYMENT. Each of the following shall be an "Event
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Requiring Payment":
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(a) Nonpayment. Borrower's failure to pay, when and as due or demanded,
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any of the Indebtedness, or Guarantor's failure to comply with or perform
any agreement or covenant contained herein;
(b) Warranties. Any representation, warranty, schedule, certificate,
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financial statement, report, notice, or other writing furnished by or on
behalf of the Guarantor to the Lender is false or misleading in any
material respect on the date as of which the facts therein set forth are
stated or certified;
(c) Lack of Enforceability. This Guaranty shall be repudiated or become
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unenforceable or incapable of performance;
(d) Dissolution. The Guarantor shall dissolve, liquidate, merge,
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consolidate, or cease to be in existence for any reason;
(e) Credit Rating. The Guarantor's senior unsecured debt rating shall
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be less than BBB by Standard & Poor's, a division of McGraw Hill Company,
Inc. or Baa by Xxxxx'x Investors Services, Inc.;
(f) Bankruptcy. Any bankruptcy, insolvency, reorganization,
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arrangement, readjustment, liquidation, dissolution, or similar proceeding,
domestic or foreign, is instituted by or against the Guarantor or the
Borrower, and any involuntary proceedings is not dismissed within 60 days;
or the Guarantor or Borrower shall take any steps toward, or to authorize
such a proceeding; or
(g) Insolvency. The Guarantor or the Borrower shall become insolvent,
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generally shall fail or be unable to pay its debts as they mature, shall
admit in writing its inability to pay its debts as they mature, shall make
a general assignment for the benefit of its creditors, shall enter into any
composition or similar agreement, or shall suspend the transaction of all
or a substantial portion of its usual business.
SECTION 3. PAYMENT REQUIREMENT. Upon the occurrence of any Event Requiring
Payment, the Guarantor agrees to pay the Lender, immediately upon the Lender's
demand therefor, the full amount which would be payable hereunder by the
Guarantor if all Indebtedness were then due and payable. Further, upon the
occurrence of an Event Requiring Payment specified in Section 2(f)-(g), the full
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amount which would be payable hereunder if all Indebtedness were then due and
payable shall be immediately and automatically due and payable without action of
any kind on the part of the Lender.
SECTION 4. REINSTATEMENT. This Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time payment of the Indebtedness, or
any part thereof, is rescinded or must otherwise be returned by the Lender upon
the insolvency, bankruptcy or
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reorganization of the Borrower or otherwise, all as though such payment to the
Lender had not been made.
SECTION 5. OBLIGATIONS UNCONDITIONAL; WAIVER OF DEFENSES. No fact or
circumstance whatsoever which might at law or equity constitute a discharge or
release of, or defense to the obligations of, a guarantor or surety shall limit
or affect any obligations of the Guarantor under this Guaranty. Without
limiting the generality of the foregoing:
(a) The Lender may at any time and from time to time, without notice to
the Guarantor, take any or all of the following actions without affecting
or impairing the liability of the Guarantor on this Guaranty:
(i) renew or extend time of payment of the Indebtedness;
(ii) accept, substitute, release or surrender any security for the
Indebtedness;
(iii) accept other guarantors; and
(iv) release any person primarily or secondarily liable on the
Indebtedness (including without limitation the Borrower, any
indorser, and any other guarantor).
(b) No delay in enforcing payment of the Indebtedness, nor any
amendment, waiver, change, or modification of any terms of any instrument
which evidences or is given in connection with the Indebtedness, shall
release the Guarantor from any obligation hereunder. The obligations of
the Guarantor under this Guaranty are and shall be primary, continuing,
unconditional and absolute, irrespective of the value, genuineness,
regularity, validity or enforceability of any documents or instruments
respecting or evidencing the Indebtedness. In order to hold the Guarantor
liable hereunder, there shall be no obligation on the part of the Lender,
at any time, to resort for payment to the Borrower or any other guaranty or
to any security for the Indebtedness or this Guaranty. The Lender shall
have the right to enforce this Guaranty irrespective of whether or not
other proceedings or steps are being taken against any property securing
the Indebtedness or any other party primarily or secondarily liable on any
of the Indebtedness.
(c) The Guarantor waives presentment, protest, demand, notice of
dishonor or default, notice of acceptance of this Guaranty, notice of any
loans made, extensions granted or other action taken in reliance hereon,
and all demands and notices of any kind in connection with this Guaranty or
the Indebtedness.
(d) Notwithstanding anything to the contrary herein, Lender agrees not
to amend the Indebtedness without the prior written consent of Guarantor if
and only if such amendment relates to: (i) subordinating the Lender's
right to payment of the Indebtedness to the payment of any other
indebtedness or equity interest of the Borrower,
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(ii) extending the scheduled maturity date of the Note or any installments
thereunder, (iii) changing the mandatory prepayment provision contained in
Section 3.2 of the Note, (iv) increasing the principal amount of the
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Indebtedness above $16,000,000, (v) impairing the subrogation rights of the
Guarantor or (vi) extending the Final Drawdown Date (as defined in the
Note).
SECTION 6. DEBT SUBORDINATION. The Guarantor hereby subordinates to the
Indebtedness any claim or right to receive payment of any or all indebtedness of
the Borrower to the Guarantor whether now existing or hereafter created or
arising, direct or indirect, absolute or contingent, due or to become due, now
or hereafter existing (all such, the "Subordinated Indebtedness"), and agrees
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that the Lender's claim and right to receive payment in full of the Indebtedness
shall be prior and superior. The Guarantor agrees not to accept payment of the
Subordinated Indebtedness, including interest thereon, or any part thereof, or
to enforce any security interest or accept proceeds of any security therefor,
from the Borrower as long as any Event Requiring Payment has occurred or is
continuing.
SECTION 7. SUBROGATION. Until the Indebtedness and any other amounts payable
hereunder are paid in full, Guarantor shall not pursue any claim or exercise any
right that Guarantor might now have or hereafter acquire against Borrower or any
other person primarily or contingently liable on the Indebtedness (including
without limitation any maker, indorser or guarantor) or that arises from the
existence or performance of Guarantor's obligations under this Guaranty,
including without limitation any right of subrogation, reimbursement,
exoneration, contribution or indemnification, or any right of participation in
any claim or remedy of the Lender against Borrower or any security for the
Indebtedness which the Lender now has or hereafter acquires, however arising.
SECTION 8. APPLICATION OF FUNDS. Any and all payments upon the Indebtedness
made by the Borrower, by the Guarantor, or by any other person, and the proceeds
of any and all security for any of the Indebtedness may be applied by the Lender
upon such of the items of the Indebtedness as it may determine.
SECTION 9. PARTICIPATIONS. The Lender may, without notice of any kind, sell,
assign, transfer or grant participations in all or any of the Indebtedness. In
such event each and every immediate and successive assignee, transferee or
holder of or participant in all or any of the Indebtedness shall have the right
to enforce this Guaranty, by suit or otherwise, for the benefit of such
assignee, transferee, holder or participant as fully as if such assignee,
transferee, holder or participant were herein by name specifically given such
rights, powers and benefits, but the Lender shall have an unimpaired right,
prior and superior to that of any assignee, transferee or holder to enforce this
Guaranty for the benefit of the Lender or any such participant, as to so much of
the Indebtedness as it has not sold, assigned or transferred.
SECTION 10. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and
warrants to the Lender that:
(a) The Guarantor is a corporation duly existing and in good standing
under the laws of the state indicated in the heading; the Guarantor is duly
qualified, in good
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standing and authorized to do business in each jurisdiction where, because
of the nature of its activities or properties, such qualification is
required, except where failure to be so qualified would not have a material
adverse affect on the ability of the Guarantor to perform its obligations
hereunder. The Guarantor has the corporate power and authority to own its
properties and to carry on its businesses as now being conducted.
(b) The execution and delivery by the Guarantor of this Guaranty and any
document or instrument executed in connection herewith, and the performance
of the Guarantor's obligations hereunder and thereunder:
(i) are within the Guarantor's corporate powers;
(ii) have been authorized by all necessary action;
(iii) have received all necessary governmental approval (if any
shall be required);
(iv) do not and will not contravene or conflict with (A) any
provision of law or of the charter, by-laws of the Guarantor or (B)
of any agreement binding upon the Guarantor which contravention or
conflict would not have a material adverse effect on the ability of
the Guarantor to perform its obligations hereunder; and
(v) are within the direct corporate interest and purposes of the
Guarantor.
This Guaranty constitutes an obligation of the Guarantor enforceable
against the Guarantor in accord with the terms hereof.
(c) The Guarantor's audited consolidated financial statements as at
December 31, 1998 have been prepared in conformity with generally accepted
accounting principles applied on a basis consistent with that of the
preceding fiscal year, and accurately present the financial condition of
the Guarantor and any consolidated subsidiary as at such dates and the
results of their operations for the respective periods then ended. Since
the date of those financial statements, no material, adverse changes in the
business, properties, assets, operations, conditions or prospects of the
Guarantor has occurred of which the Lender has not been advised in writing
before this Guaranty was signed.
(d) The Guarantor has filed or caused to be filed all federal, state and
local tax returns (including information returns) which, to the knowledge
of the Guarantor are required to be filed, and has paid or has caused to be
paid all taxes as shown on such returns or on any assessment received by
it, to the extent that such taxes have become due (except for current taxes
not delinquent and taxes being contested in good faith and by appropriate
proceedings for which adequate reserves have been provided on the books of
the Guarantor, and as to which no foreclosure, distraint, sale or similar
proceedings have
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been commenced). The Guarantor has set up reserves in accordance with
generally accepted accounting principles for the payment of additional
taxes for years which have not been audited by the respective tax
authorities.
(e) No litigation (including derivative actions), arbitration
proceedings or governmental proceedings are pending or, to its knowledge,
threatened against the Guarantor which would (singly or in the aggregate),
if adversely determined, have a material and adverse effect on the
financial condition, continued operations or prospects of the Guarantor.
SECTION 11. COVENANTS. So long as this Guaranty remains in effect, the
Guarantor agrees that it shall, and shall cause any subsidiary to comply with
the following covenants, unless the Lender consents otherwise in writing:
(a) The Guarantor shall furnish to the Lender:
(i) Within 45 days after the end of each quarter of each fiscal
year of the Guarantor, a copy of an unaudited financial statement
of the Guarantor and any subsidiary prepared on a consolidating
and consolidated basis consistent with the audited consolidated
financial statements of the Guarantor and any subsidiary referred
to in Section 10(c), signed by an authorized officer of the
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Guarantor and consisting of at least: (A) a balance sheet as at
the close of such quarter; and (B) a statement of earnings and
source and application of funds for such quarter and for the
period from the beginning of such fiscal year to the close of
such quarter; provided that, so long as the common stock of the
Guarantor is listed for trading on New York Stock Exchange
("NYSE"), the foregoing requirement as to the quarterly financial
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statements of the Guarantor may be satisfied by delivery to
Lender of the Guarantor's Quarterly Report on Form 10-Q as filed
with the Securities Exchange Commission ("SEC") within 60 days
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after the end of each quarter of each fiscal year of the
Guarantor;
(ii) Within 90 days after the end of each fiscal year of the
Guarantor, a copy of an annual audit report of the Guarantor and
any subsidiary prepared on a consolidated basis and in conformity
with generally accepted accounting principles applied on a basis
consistent with the audited consolidated financial statements of
the Guarantor and any subsidiary referred to above, duly
certified by independent certified public accountants of
recognized standing satisfactory to the Lender, accompanied by an
opinion without significant qualification; provided that, so long
as the common stock of the Guarantor is listed for trading on
NYSE, the foregoing requirement as to Guarantor's annual audit
reports may be satisfied by the delivery to Lender within 105
days after the end of each fiscal year of the Guarantor of
Guarantor's Annual Report to
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Stockholders and the Annual Report on Form 10-K filed with the
SEC; and
(iii) Immediately upon learning of the occurrence of an Event
Requiring Payment or an Unmatured Event Requiring Payment with
respect to the Guarantor only, written notice describing the same
and the steps being taken by the Guarantor in respect thereof.
SECTION 12. As used herein the term "Unmatured Event Requiring Payment" means
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an event or condition which would become an Event Requiring Payment with notice
or the passage of time or both.
SECTION 13. MISCELLANEOUS.
(a) The Lender may, by written notice to the Guarantor, at any time
and from time to time, waive any Event Requiring Payment or Unmatured Event
Requiring Payment, which shall be for such period and subject to such
conditions as shall be specified in any such notice. In the case of any
such waiver, the Lender and the Guarantor shall be restored to their former
position and rights hereunder, and any Event Requiring Payment or Unmatured
Event Requiring Payment so waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to or impair any right
consequent thereon or to any subsequent or other Event Requiring Payment or
Unmatured Event Requiring Payment.
(b) All notices, requests and demands to or upon the respective
parties hereto shall be deemed to have been given or made three (3)
business days after being deposited in the mail, postage prepaid,
addressed:
(i) if to the Lender to 000 Xxxx Xxxxxxxx, Xxxx Xxxxxx,
Xxxxxxxx 00000 (Attention: Division Head Commercial Division)
(ii) if to the Guarantor to SBC Communications, Inc., 7th Floor,
000 X. Xxxxxxx, Xxx Xxxxxxx, Xxxxx 00000 (Attention: Treasurer)
or to such other address as may be hereafter designated in writing by the
respective parties hereto.
(c) No failure to exercise, and no delay in exercising, on the part
of the Lender of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies of the Lender herein provided are
cumulative and not exclusive of any rights or remedies provided by law.
(d) This Guaranty shall, upon execution and delivery by the Guarantor
and acceptance by the Lender in Chicago, Illinois, become effective and
shall be binding upon and inure to the benefit of the Guarantor, the Lender
and their respective successors
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and assigns, except that the Guarantor may not transfer or assign any of
its rights or interests hereunder without the prior written consent of the
Lender.
(e) Captions in this Guaranty are for convenience of reference only and
shall not define or limit any of the terms or provisions hereof.
References herein to Sections or provisions without reference to the
document in which they are contained are references to this Guaranty.
(f) Unless the context requires otherwise, wherever used herein the
singular shall include the plural and vice versa, and the use of one gender
shall also denote the other where appropriate.
(g) This Guaranty may be executed on any number of separate
counterparts; each counterpart shall be deemed an original instrument; and
all of the counterparts taken together shall be deemed to constitute one
and the same instrument.
(h) This Guaranty, and any document or instrument executed in connection
herewith shall be governed by, and construed and interpreted in accordance
with, the internal laws of the State of Illinois, and shall be deemed to
have been executed in the State of Illinois.
(i) The Guarantor, and the Lender by its acceptance hereof, irrevocably
agree that all suits, actions or other proceedings in any way, manner or
respect, arising out of or from or related to this Guaranty, shall be
subject to litigation in courts having situs within Chicago, Illinois. The
Guarantor, and the Lender by its acceptance hereof, hereby consent and
submit to the jurisdiction of any local, state or federal court located
within said city and state. The Guarantor, and the Lender by its
acceptance hereof, hereby waive any right it may have to request or demand
trial by jury, to transfer or change the venue of any suit, action or other
proceeding brought against either party in accordance with this Section, or
to claim that any such proceeding has been brought in an inconvenient
forum.
SBC COMMUNICATIONS INC.
By:______________________________
Its:_____________________________
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