1
EXHIBIT 10.78
GENERAL CONTINUING GUARANTY
THIS GENERAL CONTINUING GUARANTY ("Guaranty"), dated as of
December 13, 2000, is executed and delivered by FUTURELINK CORP., a Delaware
corporation ("Parent") and each of Parent's Subsidiaries identified on the
signature pages hereof (such Subsidiaries, together with Parent, each a
"Guarantor" and collectively, the "Guarantors"), in favor of FOOTHILL CAPITAL
CORPORATION, a California corporation ("Guarantied Party"), in light of the
following:
WHEREAS, FutureLink Europe Limited, a corporation organized
under the laws of the England and Wales ("Debtor") and Guarantied Party are,
contemporaneously herewith, entering into the Loan Agreement; and
WHEREAS, in order to induce Guarantied Party to extend financial
accommodations to Debtor pursuant to the Loan Agreement, and in consideration
thereof, and in consideration of any loans or other financial accommodations
heretofore or hereafter extended by Guarantied Party to Debtor, whether pursuant
to the Loan Agreement or otherwise, each Guarantor has agreed to guaranty the
Guarantied Obligations.
NOW, THEREFORE, in consideration of the foregoing, each
Guarantor hereby agrees, in favor of Guarantied Party, as follows:
1. Definitions and Construction.
(a) Definitions. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Loan Agreement.
The following terms, as used in this Guaranty, shall have the following
meanings:
"Debtor" has the meaning set forth in the recitals to
this Guaranty.
"Guarantied Obligations" shall mean: (a) the due and
punctual payment of the principal of, and interest (including, any and
all interest which, but for the application of the provisions of the
Bankruptcy Code, would have accrued on such amounts) on, any and all
premium on, and any and all fees, costs, and expenses incurred in
connection with or on the Indebtedness owed by Debtor to Guarantied
Party pursuant to the terms of the Subsidiary Loan Documents; and (b)
the due and punctual payment of all other present or future Indebtedness
owing by Debtor to Guarantied Party.
"Guarantied Party" shall have the meaning set forth in
the preamble to this Guaranty.
"Guarantor" shall have the meaning set forth in the
preamble to this Guaranty.
1
2
"Guaranty" shall have the meaning set forth in the
preamble to this Guaranty.
"Indebtedness" shall mean any and all obligations,
indebtedness, or liabilities of any kind or character owed by Debtor to
Guarantied Party and arising directly or indirectly out of or in
connection with the Loan Agreement or the other Subsidiary Loan
Documents, including all such obligations, indebtedness, or liabilities,
whether for principal, interest (including any and all interest which,
but for the application of the provisions of the Bankruptcy Code, would
have accrued on such amounts), premium, reimbursement obligations, fees,
costs, expenses (including attorneys fees), or indemnity obligations,
whether heretofore, now, or hereafter made, incurred, or created,
whether voluntarily or involuntarily made, incurred, or created, whether
secured or unsecured (and if secured, regardless of the nature or extent
of the security), whether absolute or contingent, liquidated or
unliquidated, or determined or indeterminate, whether Debtor is liable
individually or jointly with others, and whether recovery is or
hereafter becomes barred by any statute of limitations or otherwise
becomes unenforceable for any reason whatsoever, including any act or
failure to act by Guarantied Party.
"Loan Agreement" shall mean that certain Loan Agreement,
dated as of December 13, 2000, entered into between Debtor and
Guarantied Party.
(b) Construction. Unless the context of this Guaranty clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the part includes the whole, the terms
"include" and "including" are not limiting, and the term "or" has the inclusive
meaning represented by the phrase "and/or." The words "hereof," "herein,"
"hereby," "hereunder," and other similar terms refer to this Guaranty as a whole
and not to any particular provision of this Guaranty. Any reference in this
Guaranty to any of the following documents includes any and all alterations,
amendments, restatements, extensions, modifications, renewals, or supplements
thereto or thereof, as applicable: the Loan Agreement; this Guaranty; and the
other Subsidiary Loan Documents. Neither this Guaranty nor any uncertainty or
ambiguity herein shall be construed or resolved against Guarantied Party or any
Guarantor, whether under any rule of construction or otherwise. On the contrary,
this Guaranty has been reviewed by each Guarantor, Guarantied Party, and their
respective counsel, and shall be construed and interpreted according to the
ordinary meaning of the words used so as to fairly accomplish the purposes and
intentions of Guarantied Party and each Guarantor.
2. Guarantied Obligations. Each Guarantor jointly and severally hereby
irrevocably and unconditionally guaranties to Guarantied Party, as and for its
own debt, until final and indefeasible payment thereof has been made, (a) the
payment of the Guarantied Obligations, in each case when and as the same shall
become due and payable, whether at maturity, pursuant to a mandatory prepayment
requirement, by acceleration, or otherwise; it being the intent of each
Guarantor that the guaranty set forth herein shall be a guaranty of payment and
not a guaranty of collection; and (b) the punctual and faithful performance,
2
3
keeping, observance, and fulfillment by Debtor of all of the agreements,
conditions, covenants, and obligations of Debtor contained in the Loan
Agreement, and under each of the other Subsidiary Loan Documents.
3. Continuing Guaranty. This Guaranty includes Guarantied Obligations
arising under successive transactions continuing, compromising, extending,
increasing, modifying, releasing, or renewing the Guarantied Obligations,
changing the interest rate, payment terms, or other terms and conditions
thereof, or creating new or additional Guarantied Obligations after prior
Guarantied Obligations have been satisfied in whole or in part. To the maximum
extent permitted by law, each Guarantor hereby waives any right to revoke this
Guaranty as to future Indebtedness. If such a revocation is effective
notwithstanding the foregoing waiver, each Guarantor acknowledges and agrees
that (a) no such revocation shall be effective until written notice thereof has
been received by Guarantied Party, (b) no such revocation shall apply to any
Guarantied Obligations in existence on such date (including any subsequent
continuation, extension, or renewal thereof, or change in the interest rate,
payment terms, or other terms and conditions thereof), (c) no such revocation
shall apply to any Guarantied Obligations made or created after such date to the
extent made or created pursuant to a legally binding commitment of Guarantied
Party in existence on the date of such revocation, (d) no payment by such
Guarantor, Debtor, or from any other source, prior to the date of such
revocation shall reduce the maximum obligation of such Guarantor hereunder, and
(e) any payment by Debtor or from any source other than such Guarantor
subsequent to the date of such revocation shall first be applied to that portion
of the Guarantied Obligations as to which the revocation is effective and which
are not, therefore, guarantied hereunder, and to the extent so applied shall not
reduce the maximum obligation of Guarantor hereunder.
4. Performance Under this Guaranty. In the event that Debtor fails to
make any payment of any Guarantied Obligations, on or before the due date
thereof, or if Debtor shall fail to perform, keep, observe, or fulfill any other
obligation referred to in clause (b) of Section 2 hereof in the manner provided
in the Loan Agreement or the other Subsidiary Loan Documents, as applicable,
each Guarantor immediately shall cause such payment to be made or each of such
obligations to be performed, kept, observed, or fulfilled.
5. Primary Obligations. This Guaranty is a primary and original
obligation of each Guarantor, is not merely the creation of a surety
relationship, and is an absolute, unconditional, and continuing guaranty of
payment and performance which shall remain in full force and effect without
respect to future changes in conditions. Each Guarantor agrees that it is
directly, jointly and severally with any other guarantor of the Guarantied
Obligations, liable to Guarantied Party, that the obligations of Guarantor
hereunder are independent of the obligations of Debtor or any other guarantor,
and that a separate action may be brought against each Guarantor, whether such
action is brought against Debtor or any other guarantor or whether Debtor or any
other guarantor is joined in such action. Each Guarantor agrees that its
liability hereunder shall be immediate and shall not be contingent upon the
exercise or enforcement by Guarantied Party of whatever remedies it may have
against Debtor or any other guarantor, or the enforcement of any lien or
realization upon any
3
4
security Guarantied Party may at any time possess. Each Guarantor agrees that
any release which may be given by Guarantied Party to Debtor or any other
guarantor shall not release such Guarantor. Each Guarantor consents and agrees
that Guarantied Party shall be under no obligation to marshal any property or
assets of Debtor or any other guarantor in favor of such Guarantor, or against
or in payment of any or all of the Guarantied Obligations.
6. Waivers.
(a) To the fullest extent permitted by applicable law, each
Guarantor hereby waives: (i) notice of acceptance hereof; (ii) notice of any
loans or other financial accommodations made or extended under the Loan
Agreement, or the creation or existence of any Guarantied Obligations; (iii)
notice of the amount of the Guarantied Obligations, subject, however, to such
Guarantor's right to make inquiry of Guarantied Party to ascertain the amount of
the Guarantied Obligations at any reasonable time; (iv) notice of any adverse
change in the financial condition of Debtor or of any other fact that might
increase such Guarantor's risk hereunder; (v) notice of presentment for payment,
demand, protest, and notice thereof as to any instrument among the Subsidiary
Loan Documents; (vi) notice of any Default or Event of Default under the Loan
Agreement; and (vii) all other notices (except if such notice is specifically
required to be given to such Guarantor under this Guaranty or any other
Subsidiary Loan Documents to which such Guarantor is a party) and demands to
which such Guarantor might otherwise be entitled.
(b) To the fullest extent permitted by applicable law, each
Guarantor waives the right by statute or otherwise to require Guarantied Party
to institute suit against Debtor or to exhaust any rights and remedies which
Guarantied Party has or may have against Debtor. In this regard, each Guarantor
agrees that it is bound to the payment of each and all Guarantied Obligations,
whether now existing or hereafter arising, as fully as if such Guarantied
Obligations were directly owing to Guarantied Party by such Guarantor. Each
Guarantor further waives any defense arising by reason of any disability or
other defense (other than the defense that the Guarantied Obligations shall have
been fully and finally performed and indefeasibly paid in full in cash) of
Debtor or by reason of the cessation from any cause whatsoever of the liability
of Debtor in respect thereof.
(c) To the fullest extent permitted by applicable law, each
Guarantor hereby waives: (i) any rights to assert against Guarantied Party any
defense (legal or equitable), set-off, counterclaim, or claim which such
Guarantor may now or at any time hereafter have against Debtor or any other
party liable to Guarantied Party; (ii) any defense, set-off, counterclaim, or
claim, of any kind or nature, arising directly or indirectly from the present or
future lack of perfection, sufficiency, validity, or enforceability of the
Guarantied Obligations or any security therefor; (iii) any defense arising by
reason of any claim or defense based upon an election of remedies by Guarantied
Party including any defense based upon an election of remedies by Guarantied
Party under the provisions of Sections 580d and 726 of the California Code of
Civil Procedure, or any similar law of California or any other jurisdiction;
(iv) the benefit of any statute of limitations affecting such Guarantor's
liability hereunder or the enforcement thereof, and any act which shall defer or
delay the operation of
4
5
any statute of limitations applicable to the Guarantied Obligations shall
similarly operate to defer or delay the operation of such statute of limitations
applicable to such Guarantor's liability hereunder.
(d) Until such time as all of the Guarantied Obligations have
been fully, finally, and indefeasibly paid in full in cash: (i) each Guarantor
hereby waives and postpones any right of subrogation such Guarantor has or may
have as against Debtor with respect to the Guarantied Obligations; (ii) in
addition, each Guarantor hereby waives and postpones any right to proceed
against Debtor or any other Person, now or hereafter, for contribution,
indemnity, reimbursement, or any other suretyship rights and claims
(irrespective of whether direct or indirect, liquidated or contingent), with
respect to the Guarantied Obligations; and (iii) in addition, each Guarantor
also hereby waives and postpones any right to proceed or to seek recourse
against or with respect to any property or asset of Debtor.
(e) [intentionally omitted]
(f) [intentionally omitted]
(g) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER
PROVISION SET FORTH IN THIS GUARANTY, EACH GUARANTOR HEREBY WAIVES, TO THE
MAXIMUM EXTENT SUCH WAIVER IS PERMITTED BY LAW, ANY AND ALL BENEFITS OR DEFENSES
ARISING DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE
Sections 2799, 2808, 2809, 2810, 2815, 2819, 2820, 2821, 2822, 2838, 2839, 2845,
2847, 2848, 2849, AND 2850, CALIFORNIA CODE OF CIVIL PROCEDURE Sections 580a,
580b, 580c, 580d, AND 726, AND CHAPTER 2 OF TITLE 14 OF THE CALIFORNIA CIVIL
CODE.
(h) WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER
PROVISION SET FORTH IN THIS GUARANTY, EACH GUARANTOR WAIVES ALL RIGHTS AND
DEFENSES ARISING OUT OF AN ELECTION OF REMEDIES BY THE GUARANTIED PARTY, EVEN
THOUGH THAT ELECTION OF REMEDIES, SUCH AS A NONJUDICIAL FORECLOSURE WITH RESPECT
TO SECURITY FOR A GUARANTIED OBLIGATION, HAS DESTROYED SUCH GUARANTOR'S RIGHTS
OF SUBROGATION AND REIMBURSEMENT AGAINST THE DEBTOR BY THE OPERATION OF SECTION
580d OF THE CALIFORNIA CODE OF CIVIL PROCEDURE OR OTHERWISE.
7. Releases. Each Guarantor consents and agrees that, without notice to
or by such Guarantor and without affecting or impairing the obligations of such
Guarantor hereunder, Guarantied Party may, by action or inaction, compromise or
settle, extend the period of duration or the time for the payment, or discharge
the performance of, or may refuse to, or otherwise not enforce, or may, by
action or inaction, release all or any one or more parties to, any one or more
of the terms and provisions of the Loan Agreement or any of the other Subsidiary
Loan Documents or may grant other indulgences to Debtor in respect thereof, or
may amend or modify in any manner and at any time (or from time to time) any
5
6
one or more of the Loan Agreement or any of the other Subsidiary Loan Documents,
or may, by action or inaction, release or substitute any other guarantor, if
any, of the Guarantied Obligations, or may enforce, exchange, release, or waive,
by action or inaction, any security for the Guarantied Obligations or any other
guaranty of the Guarantied Obligations, or any portion thereof.
8. No Election. Guarantied Party shall have the right to seek recourse
against each Guarantor to the fullest extent provided for herein and no election
by Guarantied Party to proceed in one form of action or proceeding, or against
any party, or on any obligation, shall constitute a waiver of Guarantied Party's
right to proceed in any other form of action or proceeding or against other
parties unless Guarantied Party has expressly waived such right in writing.
Specifically, but without limiting the generality of the foregoing, no action or
proceeding by Guarantied Party under any document or instrument evidencing the
Guarantied Obligations shall serve to diminish the liability of any Guarantor
under this Guaranty except to the extent that Guarantied Party finally and
unconditionally shall have realized indefeasible payment by such action or
proceeding.
9. Indefeasible Payment. The Guarantied Obligations shall not be
considered indefeasibly paid for purposes of this Guaranty unless and until all
payments to Guarantied Party are no longer subject to any right on the part of
any person whomsoever, including a Guarantor, a Guarantor as a debtor in
possession, or any trustee (whether appointed under the Bankruptcy Code or
otherwise) of such Guarantor's assets to invalidate or set aside such payments
or to seek to recoup the amount of such payments or any portion thereof, or to
declare same to be fraudulent or preferential. In the event that, for any
reason, all or any portion of such payments to Guarantied Party is set aside or
restored, whether voluntarily or involuntarily, after the making thereof, the
obligation or part thereof intended to be satisfied thereby shall be revived and
continued in full force and effect as if said payment or payments had not been
made and Guarantor shall be liable for the full amount Guarantied Party is
required to repay plus any and all costs and expenses (including reasonable
attorneys fees) paid by Guarantied Party in connection therewith.
10. Financial Condition of Debtor. Each Guarantor represents and
warrants to Guarantied Party that it is currently informed of the financial
condition of Debtor and of all other circumstances which a diligent inquiry
would reveal and which bear upon the risk of nonpayment of the Guarantied
Obligations. Each Guarantor further represents and warrants to Guarantied Party
that it has read and understands the terms and conditions of the Loan Agreement
and the other Subsidiary Loan Documents. Each Guarantor hereby covenants that it
will continue to keep itself informed of Debtor's financial condition, the
financial condition of other guarantors, if any, and of all other circumstances
which bear upon the risk of nonpayment or nonperformance of the Guarantied
Obligations.
11. Payments; Application. All payments to be made hereunder by each
Guarantor shall be made in lawful money of the United States of America at the
time of payment, shall be made in immediately available funds, and shall be made
without deduction (whether for taxes or otherwise) or offset. All payments made
by Guarantor hereunder shall
6
7
be applied as follows: first, to all reasonable costs and expenses (including
reasonable attorneys fees) incurred by Guarantied Party in enforcing this
Guaranty or in collecting the Guarantied Obligations; second, to all accrued and
unpaid interest, premium, if any, and fees owing to Guarantied Party
constituting Guarantied Obligations; and third, to the balance of the Guarantied
Obligations.
12. Attorneys Fees and Costs. Each Guarantor agrees to pay, on demand,
all reasonable attorneys fees and all other reasonable costs and expenses which
may be incurred by Guarantied Party in the enforcement of this Guaranty or in
any way arising out of, or consequential to the protection, assertion, or
enforcement of the Guarantied Obligations (or any security therefor),
irrespective of whether suit is brought.
13. Notices. Unless otherwise specifically provided in this Guaranty,
any notice or other communication relating to this Guaranty shall be made in
care of Debtor in accordance with the terms of the Loan Agreement.
14. Cumulative Remedies. No remedy under this Guaranty, under the Loan
Agreement, or any other Subsidiary Loan Document is intended to be exclusive of
any other remedy, but each and every remedy shall be cumulative and in addition
to any and every other remedy given under this Guaranty, under the Loan
Agreement, or any other Subsidiary Loan Document, and those provided by law. No
delay or omission by Guarantied Party to exercise any right under this Guaranty
shall impair any such right nor be construed to be a waiver thereof. No failure
on the part of Guarantied Party to exercise, and no delay in exercising, any
right under this Guaranty shall operate as a waiver thereof; nor shall any
single or partial exercise of any right under this Guaranty preclude any other
or further exercise thereof or the exercise of any other right.
15. Severability of Provisions. Any provision of this Guaranty which is
prohibited or unenforceable under applicable law shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.
16. Entire Agreement; Amendments. This Guaranty constitutes the entire
agreement among Guarantors and Guarantied Party pertaining to the subject matter
contained herein. This Guaranty may not be altered, amended, or modified, nor
may any provision hereof be waived or noncompliance therewith consented to,
except by means of a writing executed by each Guarantor and Guarantied Party.
Any such alteration, amendment, modification, waiver, or consent shall be
effective only to the extent specified therein and for the specific purpose for
which given. No course of dealing and no delay or waiver of any right or default
under this Guaranty shall be deemed a waiver of any other, similar or
dissimilar, right or default or otherwise prejudice the rights and remedies
hereunder.
17. Successors and Assigns. This Guaranty shall be binding upon each
Guarantor and its successors and assigns and shall inure to the benefit of the
successors and assigns of Guarantied Party; provided, however, no Guarantor
shall assign this Guaranty or delegate any of its duties hereunder without
Guarantied Party's prior written consent and any unconsented to assignment shall
be absolutely void. In the event of any assignment or other
7
8
transfer of rights by Guarantied Party, the rights and benefits herein conferred
upon Guarantied Party shall automatically extend to and be vested in such
assignee or other transferee.
18. No Third Party Beneficiary. This Guaranty is solely for the benefit
of Guarantied Party and its successors and assigns and may not be relied on by
any other Person.
19. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER
THE VALIDITY OF THIS GUARANTY, ITS CONSTRUCTION, INTERPRETATION,
AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS GUARANTY SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND
FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, OR AT
THE SOLE OPTION OF GUARANTIED PARTY, IN ANY OTHER COURT IN WHICH GUARANTIED
PARTY SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH GUARANTOR AND GUARANTIED PARTY
WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO
ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT
ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 19.
EACH GUARANTOR AND GUARANTIED PARTY HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. EACH GUARANTOR AND GUARANTIED PARTY REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
[signature page follows]
8
9
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Guaranty as of the date first written above.
FUTURELINK CORP.,
a Delaware corporation
By: /s/ XXXXX X. XXXXXXX
-------------------------------------
Title: Vice President
FUTURELINK MICRO VISIONS CORP.,
a Delaware corporation
By: /s/ XXXXX X. XXXXXXX
-------------------------------------
Title: Vice President
FUTURELINK ASYNC CORP.,
a Delaware corporation
By: /s/ XXXXX X. XXXXXXX
-------------------------------------
Title: Vice President
FUTURELINK PLEASANTON CORP.,
a Delaware corporation
By: /s/ XXXXX X. XXXXXXX
-------------------------------------
Title: Vice President
FUTURELINK MADISON CORP.,
a Delaware corporation
By: /s/ XXXXX X. XXXXXXX
-------------------------------------
Title: Vice President
FUTURELINK VSI CORP.,
a Maryland corporation
By: /s/ XXXXX X. XXXXXXX
-------------------------------------
Title: Vice President
9
10
KNS HOLDINGS LIMITED, a corporation
organized under the laws of the England
By: /s/ XXXXX XXXXXX
-------------------------------------
Title: Director
By: /s/ YURI PASEA
-------------------------------------
Title: Director
10
